E3.21 LO 3.2 Cost drivers: service firm Friendly Skies Travel is a travel agency that has branches
Question:
E3.21 LO 3.2 Cost drivers: service firm Friendly Skies Travel is a travel agency that has branches in many major shopping centres. A typical branch employs five full-time staff: a manager and four customer service staff. Casual customer service staff are called in for periods of high demand and are normally employed for three-hour shifts. Customer service staff book flights for customers on most major airlines. These staff also assist in identifying accommodation and rental car options for customers. Required 1. Prepare a list of five major costs likely to be incurred by Friendly Skies Travel. 2. For each cost, suggest a possible cost driver that could be used to estimate cost functions and predict cost behaviour. 3. Having identified these cost drivers, describe the cost behaviour pattern that you would expect for each cost, giving your reasons.
Step by Step Answer:
Management Accounting Information For Creating And Managing Value
ISBN: 9781743767603
9th Edition
Authors: Kim Langfield Smith, David Smith, Paul Andon, Ronald W. Hilton