While these tutorial tasks MUST be submitted Individually, you are encourage to work through these tasks together with the other members of your team, both during this week’s tutorial and in your own time. This is a good opportunity to ensure that all members of your group can calculate a breakable point before and after-tax, a margin of safety and make a managerial decision regarding the addition of a new product (in this tutorial exercise, the addition of a new route).

All answers must be inserted into the on-line form provided in ALMS titled, “Topic 9 Tutorial Exercises”. Kangaroo Alertness Kangaroo Alertness In small local carrier located In the Kimberly region of Western Australia. All seats are economy class and the following data is available: 1. What is the break-even point in number of passengers per month? 2. What Is the break-even point in sales revenue dollars per month? 2100000 3. What Is the break-even point In number of flights per month (round up)? If Kangaroo Airline currently has on average 40,000 passengers per month what is Kangaroo Airline’s margin of safety in number of passengers? 5. If Kangaroo Airlines raises its average full passenger fare to $85 and the average variable costs per passenger will remain at $30, it is estimated that the load factor will decrease to 60 percent. What will be the break-even point in number of flights (round up)? 6. The cost of aviation fuel Is a significant variable cost to any airline.

If eel charges Increase by $8 per barrel, It Is estimated that variable cost per passenger will Increase to $40 however that average full passenger fare will remain at the original $70 per passenger as will the original load factor of 75 percent. What fuel is a significant variable cost to any airline. If fuel charges increase by $8 per barrel, it is estimated that variable cost per passenger will increase to $40 however the average full passenger fare will remain at the original $70 per passenger as will he original load factor of 75%.

What will be the new break-even point in number of passengers? What will be the new break-even point in number of flights (round up)? 8. Kangaroo Airlines has experienced an increase in average variable cost per passenger to $35 and an increase in fixed costs to $1 Kangaroo Airlines has decided to increase the average full passenger fare to $80. How many of passengers are needed to generate an after-tax profit of $400,000, if the company tax rate is 30 percent (round up)?

Do you think Jim Is solely motivated by profit? I think Jim Isn’t solely motivated by profit; he seems to care more about the needs of his community than making a profit In his business. However Jim Is successful and experienced with his business and by appealing to the communities needs his profit increases. 2. Identify what you think are the businesses core values. The businesses core values would be the values of their customers; they provide good services to their customers.

The business also believes in building trust with the local community by buying resources from other businesses. They also care about the environment by re-cycling food and paper scraps from the compost and then sells the compost to locals. They also encourage customers to eat in and they have installed rainwater tanks where they use the rainwater on the businesses native garden. 3. Identify five stakeholders of the business and explain how the business affects them. (Employees, Community, Local suppliers, Environment and customers).

The business provides employees with opportunities to Improve their skills. In return employees tend to stay and the businesses profit Increases as well as the employee and customer loyalty. The business provides the community with things such as showcasing the area’s native plants, selling seedlings to customers and sponsoring high schools. As much as possible Jim buys his stock and other requirements from local businesses, building a relationship with other businesses could also benefit his business as they could share experiences and skills with each other to benefit both businesses.

Jim seems to be very environmentally friendly, the restaurant re-cycles DOD and paper scraps for compost and sells the compost to customers, he installed rainwater tanks and uses the rainwater to water the businesses native garden. The business uses large volume oil waste drums were they not only use to put the waste of oil from their garage but also local residents bring they’re waste there too. This brings In more customers, These stakeholders affect the business because In return the business gets loyal customers, and builds a profit by providing services to the community.

The business sponsors a local high school and in return the high school advertise his business for free. Growing seedlings with the local high school makes a profit, and part of the profit goes to the high school. 4. Discuss how the business has behaved in socially responsible manner. The business has behaved in a socially responsible manner because the way the business is run and the way they treat the employees, customers, community, environment etc.

The business believes in building trust with the local community. The business employs local people whom they train and once a year they send his staff to Perth to appropriate courses to up-date and Improve their skills. . What business benefits occurred from the sponsorship deal with the local high school? The business let the high school plant seedlings in which the profit went advertised the business for free; therefore this may result in more local customers. 6.

Why should the business act responsibly towards the environment in their operations? The reason the business should act responsibly to the environment because it could be a way they could get more customers that approve of what they’re doing as people that are looking for more environmentally friendly alternatives. Another reason could be more profits and more advertising as it could be a way to help out the community and environment but also getting their name out their for more customers, thus making for of a profit.

Could be a way to make an alliance with other businesses making more of an impact to the environment and making both businesses more environmentally friendly. 7. Describe what steps the station has taken to contribute to environmental sustainability. The businesses disposes of oil waste that has been produced in their garage, they also provide the oil waste drum to any local residents to also dispose feely of their oil waste. The businesses use rainwater tanks to collect rainwater in which they use to water the businesses plants.

The business encourages customers to eat in as much as possible and recycles food and paper scraps. 8. In your opinion, do the business that practice social and environmentally responsibility have the competitive edge for those who do not. Why/why not? I think businesses that practice social and environmentally responsibility are better, I believe this because they do things that can benefit others, as oppose to Just benefiting themselves. For example this business benefits the community, the customers/locals, the environment etc.

Also another reason is they get a customer increase because people often now days try to find a more environmentally friendly alternative. 9. Social and environmental responsibilities can be unwelcome restriction on business. Discuss. A business might find it harder to become environmentally friendly cost wise, and harder to shape a business in this way. The coast of the products may rise if the product uses environmentally friendly materials as it may be more expensive to order, and may through off customers looking for budget products.

Businesses with inexperience may find it harder to make their business more environmentally friendly especially if starting a small business. Gloria Jean’s coffee. 1. Who benefits from this alliance? The farm workers and tropical wildlife would benefit from this alliance. 2. What benefits do the farm workers get? Improving the lives of farm workers, treating the farm workers and their families with 3. How does it help the environment? The rainforest’s alliance supports their shared goal of conserving ecosystems where fee is grown.

The rain forest alliance collaborates with leading conservation organizations around the world to help foresters to establish sustainable land use practices that reflect environmental concerns. The rainforest’s alliance also works with farmers to conserve natural resources to protect forests, rivers and other wildlife habitats. 4. How does Gloria Jean’s benefit from this alliance? Gloria Jean’s benefits from this alliance because it means they get more loyal customers. Customers also may switch to Gloria Jeans for a more environmentally friendly coffee.