2.4 Case Study 1: Cost Terms and Concepts
For this Case Study complete the four requirements below:
- ABC Airlines has determined both the fixed and variable costs per flying hour associated with flying each of the 10 different types of aircraft in their fleet. How might this type of information be useful in determining the costs associated with flying different aircraft on specific routes?
- You are a management analyst for XYZ aircraft manufacturing company. Your company is considering either to purchase or lease manufacturing equipment. Identify, discuss, and be specific on five differential costs that might exist between the two options. You can develop any assumptions you want for either alternative, but if you do, they should be explained.
- List and discuss three costs that are likely to be controllable by a city’s airport manager. List three costs that are likely to be uncontrollable by the manager.
- Refer to Problem 2-43 at the end of Chapter 2. Build or use an existing Excel Spreadsheet and complete requirements 1 and 2. The spreadsheet must accompany the submission.
For this case study, you will demonstrate your ability to correctly calculate the problem and demonstrate creative thinking by analyzing the case and answering the questions that are intended to interpret the data. Please refer to the case study section of the syllabus for additional guidance and your Case Study Rubric to review the criteria that will be used to evaluate and grade your submission. This activity is due the last day of this module. If you have chosen to complete this activity as a group assignment (optional), one member of the group will submit the assignment. Include the names of all participating group members in the top left corner of the first page of the document.
Attach are Problem 2-43 and the Excel spreadsheet where you will complete the appropriate solution in the yellow cells.