BUS 630 Week 3 DQ 1 Fixed Labor To purchase this material link Assignment-JetBlue-Airways Far North Telecom, Ltd., of Ontario, has organized a new division to manufacture and sell specialty cellular telephones. The division’s monthly costs are shown in the table below. Far North Telecom regards all of its workers as full-time employees and the company has a long- standing no layoff policy. Furthermore, production is highly automated. Accordingly, the company includes its labor costs in its fixed manufacturing overhead. The cellular phones sell for $150 each. During September, the first month of operations, the following activity was recorded: 12,000 units produced, 10,000 units sold. Comment on the five questions below the table. Respond to at least two of your fellow students’ postings. Manufacturing costs: Variable costs per unit: Direct Materials$48 Variable manufacturing overhead$2 Fixed manufacturing overhead costs (total)$360,000 Selling and administration costs:

Variable12% of sales Fixed (total)$470,000 a. Compute the unit product cost under: i. absorption costing ii. variable costing b. Prepare an absorption costing income statement for September c. Prepare a contribution format income statement for September using variable costing. d. Assume that the company must obtain additional financing in order to continue operations. As a member of top management, would you prefer to rely n the statement in (b) above or in (3) above when meeting with a group of prospective investors? e. Reconcile the absorption costing and variable costing net operating incomes in (2) and (3) above. Complete the following exercise (Research and Application 7-20) and submit to your instructor. The questions in this exercise are based on JetBlue Airways Corporation. To answer the questions, you will need to download JetBlue’s 10-K/A for the year ended December 31, 2004 (10K/A with a filing date of March 8, 2005). You do not need to print the 10-K/A to answer the questions. Required: What is JetBlue’s strategy for success in the marketplace? Does the company rely primarily on a customer intimacy, operational excellence, or product leadership customer value proposition? What evidence supports your conclusion?

What business risks does JetBlue face that may threaten the company’s ability to satisfy stockholder expectations? What are some examples of control activities that the company could use to reduce these risks? (Hint: Focus on pages of the 10-K/A.) How can the concept of unit-level activities be applies to an airline? More specifically, what are two examples of unit-level activities for JetBlue? What steps has JetBlue taken to manage these unit-level activities more efficiently? How can the concept of batch-level activities be applied to an airline? What are two examples of batch-level activities for JetBlue? What steps has JetBlue taken to manage these batch-level activities more efficiently? What is one example of a customer-level activity and an organization-sustaining activity for JetBlue? Noreen, E. W., Brewer, P. B., Garrison R. H. (2011). Managerial accounting for managers (2nd ed.). New York, NY: McGraw Hill. ISBN: For more courses visit our website