Spirit AeroSystems Spirit AeroSystems [5A5] provides aircraft maintenance, repair, and overhaul [MRO] services to the aviation industry. Competitors in the aviation industry increasingly recognize the importance of maintaining, repairing, and overhauling their eet. Enhanced eet safety also plays a vital role in influencing cus tomers' choice of airline carriers. As a result, effective MRO management can not only boost an airline's safetyr ratings, but inuence travelers preferred carrier choice.l Thene are three overhead resources at 5:515: Machines, Mechanics, and Engineers. Machines include tools and equipment, as well as specialised computer software to diagnose and x electnonic faults with engine management system, for example. Three primary activities at SAS use these resources. The activities ane Maintenance, Repair, and Overhaul. The following table identifies the number of hours ofeach overhead resource that one hour of each activity consumes: Resource Hours Consumed . _ M.............. m Wm. For example, each hour of Maintenance activity consumes 3.00 Machine hours, 4.00 Mechanic hours, and 1.50 Engineer hours. In addition to consuming overhead resources, some activities consume supplies. Supplies cost is a variable cost, and it can he directlyr attributed to the use of the activity. This means that the co st of the supplies is an integral part of the total cost of each of these activities. Each hour of the Repair activity has a Supplies cost of $1,000. Each hour of the Overhaul activity has a Supplies cost of$2,500. The following yearly information pertains to the three overhead resources used by the thnee activities. For the Machines overhead resounce, total cost was $500,000 and practical capacity was 5,000 hours. For the Mechanics overhead resource, total cost was $1,200,000 and practical capacity was 8,000 hours. For the Engineers overhead resource, total cost was 33 1,500,000 and practical capacity was 3,?50 hours. Finally, the following table sum mariaes the number of hou rs of each activity recently consumed by three customers for their aircrafts' MRO services: Activity Hours Consumed Customer 1 Customer 2 Customer 3 Hours of Maintenance Activity 2?.50 3.00 21.00 Hours of Repair Activity 15.00 14.50 0.00 Hours of Overhaul Activity m 10.00 The gross profit for each ofthe three customers was identical, i.e., $ 130,000. Required: Use time-driven activity-based co sting to answer the following questions about SAS's costs and pro fitability: 1. 2. What is the capacity cost rate of each of the three overhead resources? [DIES marks] What would the capacity co st rate of the Machines resource be if its annual capacity dropped by ED'lin? [This scenario does not apply to any other question] {(1.25 marks] What are the costs of the three overhead resources (Ma chines. Mechanics, and Engineers] consumed per hour of the Dverhaul activity? Provide the three resource costs per activity hour separately. [DPS marks] How many hours of the Mechanics resource did each customer consume? Provide the three numbers of hours per customer separately. [Ill-"5 marks] What is the tutal cost per hour of each activity? Provide the three activity costs separately. {1.5 marks] What is the total activitybased customer-related cost for each customer? Provide the three customer-related costs separately. [1.5 marks] Comment on the protability of the three customers. Hint: Use quantitative information from your analyses to make a qualitative analysis about customer protability. [1.5 marks] Reminders: Guidelines 8: Formatting FDllDW the other format guidelines from the Case Report Format Guidelines in your course outline {executive summary, appendices]. Clearly show your calculations. The level of detail is at your discretion. The case assignment must be submitted as a single Word le. If you wish to include Excel material in your report, you should cut and paste the Excel exhibit as a legible embedded spreadsheet or picture into your Word le. or a legible screenshot. [It] NUT use spreadsheet cells names [e.g.,A1*BZ] to explain your calculations. Excel les are not accepted only a single Word file. PDF files are not accepted; one mark 1will be deducted ifyou submit a PDF le. Your case answer Will be graded out of seven marks. Up to one mark will be added for format. Your group grade on this report will be modied by your individual peer evaluation score to determine your individual grade for this case assignment