Assignment on Management Accounting Flying Airline Company

Added on - 28 May 2020

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Running head: MANAGEMENT ACCOUNTINGManagement AccountingName of the Student:Name of the University:Authors Note:Table of Content
MANAGEMENT ACCOUNTING1Situation 3: Identifying viability of the proposal for Flying Airline Company.........................2A) Identifying the relevance of new proposal for special tourist charter flight if extra spacecapacity is not needed for the charter plane:..............................................................................2B) Identifying the relevance of new proposal for special tourist charter flight if extra spacecapacity is needed for the charter plane:200..............................................................................4Reference:..................................................................................................................................6
MANAGEMENT ACCOUNTING2Situation 3: Identifying viability of the proposal for Flying Airline CompanyA) Identifying the relevance of new proposal for special tourist charter flight if extraspace capacity is not needed for the charter plane:ParticularsValuePassenger revenue$ 250,000.0Cargo revenue$ 30,000.0Total revenue$ 280,000.0Variable expenses$ 90,000.0Fixed cost$ 80,000.0Total expenses$ 170,000.0Profit$ 110,000.0The evaluation of above table mainly helps in identifying the total revenues that isnormally provided by the flight. Total revenue of $280,000 is mainly achieved from thecurrent flight pattern, where $250,000 is accumulated from passenger revenue and $30,000 isachieved from cargo revenue.There are different types of expenses is incurred if normalflights are conducted, where variable expenses of $90,000 and fixed expenses of $80,000 isdirectly deducted from the total revenue obtained why the flights. This will provide a totalexpense of $170,000 incurred by the organization for continuing with normal flights. in thiscontext,Cooper (2017) stated that management needs to evaluate financial viability of aproposal before accepting it, as it might hamper future existence of the organization.ParticularsValuePassenger revenue$ 160,000.0Cargo revenue$ -Total revenue$ 160,000.0Variable expenses$ 85,000.0Fixed cost$ -Total expenses$ 85,000.0Profit$ 75,000.0
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