List the costs that a team could incur

Assignment Help Managerial Accounting

Reference no: EM132767973

Question - What costs would the New England Patriots have considered when analyzing the purchase of team planes and when pricing the rental of its team planes?

The New England Patriots recently became the first National Football League (NFL) franchise to buy its own team aircraft. The Patriots purchased two Boeing 767 planes for a total of about $10 million. Both planes have been painted with the team's logo and colors.

The Patriots will use the planes for the ten round trips for its away games during the 2017 - 2018 season. If the team would make the playoffs or Super Bowl, it would also use the planes for those games.

If a franchise does not own its own planes, the costs of chartering planes is estimated to be about $4 million for the season.

The Patriots management has indicated that it may rent out the planes when not in use by the team.

Discussion Questions

1. List the costs that a team could incur when chartering aircraft to fly its team to the away games. Use your imagination.

2. List the costs that a team could incur when owning and flying its own aircraft for transporting the team to away games. Again, use your imagination.

3. Compare your two lists of costs. What costs appear on both lists? What costs would have been relevant to the New England Patriots' aircraft purchase decision?

4. What qualitative factors would have influenced the Patriots' aircraft decision?

5. What costs would be relevant to the pricing decision for renting the planes when not in use by the team?

6. Do you think aircraft depreciation is a relevant cost to consider when pricing the rental of the Patriots' aircraft? Why or why not?

Reference no: EM132767973

Questions Cloud

Calculate the Cost of Goods Manufactured statement : Finished goods inventory, January 1 $375,000 - 2,500 units (same cost/unit for all). Calculate the Cost of Goods Manufactured statement

Network scanning techniques : What type of information can be obtained by using network scanning techniques and why it is an important intelligence gathering process.

What types of resources are available to you : How will you approach your studies? What types of resources are available to you, and how will you access and utilize them? Taking the opportunity to prepare.

Unique relationship with disaster recovery plan : The business impact analysis (BIA) has a unique relationship with the disaster recovery plan. Describe what this relationship means to you.

List the costs that a team could incur : List the costs that a team could incur when owning and flying its own aircraft for transporting the team to away games. Again, use your imagination

Identify key aspects of policy-mimic reality-communicate : Models are only useful if they help us identify key aspects of policy, mimic reality, communicate concepts in a meaningful way,

Compute the cost of job shipped to the customer : An order for P2,500 units of a custom design gauge was begun for the Suffolk Aircraft International. Compute the cost of job shipped to the customer

Discuss financial assets and portfolio management theory : Critically discuss financial assets and portfolio management theory (200 words) and analyse how the concept and theory are applied with the report

Show how the original prime numbers can be recovered : Multiply P1 and P2 together: N= P1 P2. Can N be expressed as the sum of two squares? show how the original prime numbers can be recovered using the sum

User Account

All Pages