Hi, Can someone help me with Chapter 3 problem 58P In introduction to management accounting textbook
w a Tunds until all but one w the time limit. The remaining player is the winner. ploer his TERNET EXERCISE 3.58 Cost Beha this exercise, we will fed with those costs fired to help in planning hy firms to external us hehaviors they don Log on to the Sout on "About Southwe Behavior at Southwest Airlines will look at some costs and see if we can determine the type of behavior asso costs. While firms are concerned about trying to label costs as either variable or lanning, very few costs are completely variable or fixed. The information provided mal users also often precludes a user from determining specifics about the cost hey don't want to give the competitors too much information! he Southwest Airlines Web site at www.southwest.com. Click on the information authwest." and then click on "Investor Relations." This will take you to the site where can then access the financial information you can then 1. Click on the most on the most recent "Southwest Airlines One Report" tab. Then click on the performance" en "past performance," and find the page where the 10-year summary starts. Go to this sec tion of the report. What type of information do you find there? When you look at the operating revenue information, what do you see? Look at the information ovided concerning operating expenses. Is it categorized in the same manner as the revenues? If the formation is not in the same categories, why do you think Southwest did not match it up in the same manner? 3 Now look at the section on consolidated operating statistics. Southwest measures activity in revenue passenger miles (RPMs) and capacity in available seat miles (ASM). Which of these is larger? How are the RPM and ASM determined? Is it possible for the two numbers to be the same? What information is provided for each of these items in the consolidated operating statistics section? 4. Using data from 2008 through 2011 and employing the high-low method, compute the fixed operating expense per year and the variable operating expense per RPM. Assume that half of the increase in operating expenses between 2008 and 2011 represents increases in fuel prices, which should be omit- ted from the analysis. Compare the total operating expense after omitting the increase caused by higher fuel prices and the variable expense for 2011. Is this relationship what you expected? Why or why not? Airlines are often considered to be high-fixed-cost companies. Is this consistent with your findings requirement 4? Explain why the high-low method this time might overestimate the amount of variable costs. stead of rolling a die, pla eck of four 3 x 5 cards. In ing to give an example of a game. ng a die, players could draw one of the four cost categories out of a hat (or similar container) or from * cards. This eliminates the chance element that can let some players proceed to a later round withou 1 example of a particular cost behavior. However, the chance element can add to the enjoyment of w a Tunds until all but one w the time limit. The remaining player is the winner. ploer his TERNET EXERCISE 3.58 Cost Beha this exercise, we will fed with those costs fired to help in planning hy firms to external us hehaviors they don Log on to the Sout on "About Southwe Behavior at Southwest Airlines will look at some costs and see if we can determine the type of behavior asso costs. While firms are concerned about trying to label costs as either variable or lanning, very few costs are completely variable or fixed. The information provided mal users also often precludes a user from determining specifics about the cost hey don't want to give the competitors too much information! he Southwest Airlines Web site at www.southwest.com. Click on the information authwest." and then click on "Investor Relations." This will take you to the site where can then access the financial information you can then 1. Click on the most on the most recent "Southwest Airlines One Report" tab. Then click on the performance" en "past performance," and find the page where the 10-year summary starts. Go to this sec tion of the report. What type of information do you find there? When you look at the operating revenue information, what do you see? Look at the information ovided concerning operating expenses. Is it categorized in the same manner as the revenues? If the formation is not in the same categories, why do you think Southwest did not match it up in the same manner? 3 Now look at the section on consolidated operating statistics. Southwest measures activity in revenue passenger miles (RPMs) and capacity in available seat miles (ASM). Which of these is larger? How are the RPM and ASM determined? Is it possible for the two numbers to be the same? What information is provided for each of these items in the consolidated operating statistics section? 4. Using data from 2008 through 2011 and employing the high-low method, compute the fixed operating expense per year and the variable operating expense per RPM. Assume that half of the increase in operating expenses between 2008 and 2011 represents increases in fuel prices, which should be omit- ted from the analysis. Compare the total operating expense after omitting the increase caused by higher fuel prices and the variable expense for 2011. Is this relationship what you expected? Why or why not? Airlines are often considered to be high-fixed-cost companies. Is this consistent with your findings requirement 4? Explain why the high-low method this time might overestimate the amount of variable costs. stead of rolling a die, pla eck of four 3 x 5 cards. In ing to give an example of a game. ng a die, players could draw one of the four cost categories out of a hat (or similar container) or from * cards. This eliminates the chance element that can let some players proceed to a later round withou 1 example of a particular cost behavior. However, the chance element can add to the enjoyment of
