Taking into account the advice given out by the proposals of the Function Managers there is a need for a partial overhaul of the companies working practice and corresponding adjustments need to be made to its business model with an overall aim of ensuring as smooth a transition as possible in the aftermath of the acquisition of the company by MAJORAIR. What should also be considered by the board is the long-term strategy of what market should be the focus in terms of both location (established versus expanding) and passenger type (low cost versus high end and discerning), as well as the risks posed by each of these approaches. In regards to the accounts for the season Winter 2011/12 Overall profitability for the season stands at ?148,201,205 It will be important to benchmark the overall profitability of the proposals against this figure to establish which offer would be the most attractive to the company. Another important figure to look at would be at which moment in the season the proposals meet the breakeven mark. There are two ways of looking at this figure. One is to look at which moment in time the costs are covered by simply deducting overall costs against turnover as a point in time (for example: costs are covered between months 3 & 4 and from that point on all revenue can be considered as profit.) Another is to deduct what percentage of each sale is allocated to cover the costs spread out over the entire season or year. Figures for the yearly turnover are not calculated in this analysis because of the uncertainty of passenger numbers for the summer months. In regards to Load Factor there is some room for improvement Gatwick – Washington (AM) – 77.97% Load Capacity (55.14% of total available seats) Gatwick – Washington (PM) – 88.44% Load Capacity (28.26 of total available seats) Gatwick – Boston (AM) – 79.44% Load Capacity (57.9% of total available seats) Gatwick – Boston (PM) – 84.5% Load Capacity (50.88% of total available seats) Gatwick – Seattle (AM) – 55.78% Load Capacity (34% of total available seats) Gatwick – Seattle (PM) – 77.57% Load Capacity (63.16% of total available seats) As the accounts stand there is a surplus that can be reinvested or paid out to shareholders as part of a dividend but before either of these can occur I will be analysing the proposals set by the Functional Managers in regards to an investment strategy. Some of them are long-term investments, several of them are speculative and some of them deal with short-term fixes. I will be assessing them on immediate changes to profitability, projected impacts of capital expenditure feedback (for both the immediate fiscal year and for long-term cost reductions through investments) and what impact each proposal has on the current business practice used by SMALLAIR. Network Management In the first instance, this is the proposal I would want to present to the board as I agree with the recommendations of the proposal in a number of ways. Firstly, the Washington PM flight is the most efficient at load
Cite this document
(“Management accounting Assignment Example | Topics and Well Written Essays - 2500 words”, n.d.)
Retrieved from https://studentshare.net/finance-accounting/104380-management-accounting
(Management Accounting Assignment Example | Topics and Well Written Essays - 2500 Words)
“Management Accounting Assignment Example | Topics and Well Written Essays - 2500 Words”, n.d. https://studentshare.net/finance-accounting/104380-management-accounting.
Cited: 0 times
Contents Question 1 3 Network Management 4 Marketing 6 Sales 8 Service Delivery 9 Country Manager 11 Finance Director 12 Question 2 15 Appendices 18 Appendix 1a: Given Data - SMALLAIR Winter 2011 / 12 18 Appendix 1b: Given Data - Aircraft info. Winter 2011 / 12 18 Appendix 2 – Turnover (Winter 2011/12) 19 Appendix 3: Costs (Winter 2011/12) 20 Assumptions on cost and profitability 21 Appendix 4 21 Profitability per route (winter 2011 / 12) (before proposed changes) 21 Potential Turnover per route at full capacity 22 NETWORK MANAGERS PROPOSAL 23 MARKETING MANAGERS PROPOSAL 28 SALES MANAGERS PROPOSAL 32 SERVICE DELIVERY MANAGERS PROPOSAL 34 COUNTRY MANAGERS PROPOSAL 37 Part B - Management Acco…
The main purpose of the operating statements of income statement is to help the companies to evaluate their performance on the basis of sales and expenses. The income statement reflects strongly upon the profit and loss occurred in the company according to the sales and expenses of the firm.
The management process is dynamic consisting of various activities, elements and functions (Hermanson 2010). The key major management functions involve planning, controlling, decision making and communicating. It is notable that management accounting information is very vital in executing these management functions in an organization.
The decisive issue in management accounting is whether the government, organization or consumer is more contented with the transaction or dealing made. Civic actions will tend to generate either more benefits or demerits that determine
ements and the information provided by the company, it is evident that the company is producing and selling units less than its budgeted figures show. The variance analysis is the most commonly used tool for evaluating the performance of a business by comparing its costs and
The cost driver in a particular group is selected depending on the cause effect link in the cost object and the firm’s ability to have overhead costs. The Institute of Management Accounting indicates that ABC is advantageous
However, following changes in overhead costs during 2015 saw the cost or producing one foot of pipe rise to $0.40 and the selling price remaining at $0.39. At this moment, if the company is making one foot of pipe at a cost of $0.40 and sells it at $0.39, it