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ki77a [65]
3 years ago
10

During the 1990s, several airlines were on the brink of bankruptcy. These same airlines were giving away millions of dollars in

free airline travel through their frequent-flyer programs. Do you think it would have been a good idea for these airlines to eliminate their frequent-flyer programs in order to earn higher profits?
Business
1 answer:
lara [203]3 years ago
4 0

Answer:

Assuming that the elimination of frequent-flyer programs would have enabled the airlines to earn higher profits and remain in business, then it would be a purely good idea for the airlines to eliminate their frequent-flyer programs.

The big question is, how much did the frequent-flyer programs cost the airlines?  Would the cost-savings be sufficient to eliminate their bankruptcies?  It is a known-fact that the airlines that create such programs always recover the program costs by charging higher fares.

Explanation:

The issue of airlines going bankruptcy does not seem to stem from customer-loyalty programs like the frequent-flyer programs.  The root cause lies in operational and other costs that airline managements have not been able to control.

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Owners are not required to pay it to foreign workers.

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Owners must pay it to any worker regardless of its nationality.

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Meatpackers, Inc., enters into a contract with Nevada Ranch for the delivery of a certain number of beef cattle on a set schedul
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Provide the buyer with funds for a foreseeable loss beyond the contract

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Consequential damages in contracts is different from incidental or actual damages because it causes a loss that impacts the business of the other party beyond the contract horizon, when the opposite party fails to fulfill his side of the contractual obligations.

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astraxan [27]

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<u>The actual direct labor hours are 45,000.</u>

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\begin{aligned}\text{Actual direct labor hours}&=\dfrac{\text{Applied overheads}}{\text{Overhead rate}}\\&=\dfrac{\$76,500}{1.7}\\&=45,000\end{aligned}

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Compute the overhead rate for Year 2:

\begin{aligned}\text{Overhead rate}&=\dfrac{\text{Actual overheads}}{\text{Actual direct labor hours}}\\&=\dfrac{\$78,300}{45,000}\\&=1.74\end{aligned}

<u>Therefore, the overhead rate for Year 2 is $1.74.</u>

<u />

Working note:

Calculate the overhead rate for Year 1:

\begin{aligned}\text{Overhead rate}&=\dfrac{\text{Budgeted overheads}}{\text{Estimated direct labor hours}}\\&=\dfrac{\$74,800}{44,000}\\&=1.7\end{aligned}

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