AERT 3540 Final Exam Review

For aviation businesses, aircraft maintenance operations department can be regarded as a profit or a cost center. Describe circumstances in which the maintenance department would be regarded as either a profit center or a cost center

For an FBO, the maintenance department will be a profit center. For an airline, the maintenance department will be a cost center.

Which of the following would not be classified as a variable expense for a business?

RENT FOR THE PRODUCTION FACILITY Direct Labor Direct Materials Commissions

Which of the following would be a good approach to market the convenient goods to your consumers?

Targeted Promotion MASS PROMOTION Personal Selling Advertising

Which of the following is not a component of the aviation industry?

CONGRESS Pilots Aircraft Operators Aviation Interest Groups

The mostly available internal source of funds for airlines is_____

Depreciation Deferred taxes NET EARNINGS (PROFIT) Insurance vendors

Which of the following is not one of the basic types of legal business organizations?

ENTITY Sole Proprietorship Partnership Corporation

List three activities that happen in each of the areas below: a. Flight Line area of an FBO b. Administration area of an FBO

a. Aircraft marshaling, Aircraft Parking, Taxiing, Aircraft Towing, Aircraft fueling, Aircraft de-icing, Aircraft Systems Services b. Procedures & Compliances, Weather Monitoring and information, Flight planning, Customer services

One of the results of the General Aviation Revitalization Act (GARA) of 1994 was to reduce the liability period for the aviation maintenance shops down to ______ years

18

Using the financial information for British Airways in the table below, what is the operating ratio for the financial year 2004/2005? The formula for operating ratio is provided below: Operating Ratio = (Operating Revenue / Operating Expenditure) × 100 2004/2005 and 2005/2006 Operating Revenues (Pound Million) 7,772 and 8,515 Operating Expenses (Pound Million) 7,216 and 7,810

107.7

Hannegan Aviation has purchased a brand new Cessna Caravan at the beginning of this year. The aircraft is currently worthy at $3.0 Million with an expected useful life of 10 years (for tax purposes). The company's accountant has determined that at the end of the useful life, the residual (salvage) value of the aircraft will be 15% of the original price. Using the straight-line depreciation method shown in the formula below, what will be the value of the aircraft at the end of the year 2022? Assume there is no depreciation during the year of purchase. Straight line depreciation = ( Cost − Salvage value ) / Useful life of asset Using the straight-line method, the depreciated amount is the same every year. Provide your answer without symbols or abbreviations (comma, $, Mil) and within three decimal unit.

2,235,000

Debt/Equity ratio is calculated as long-term debt or borrowing divided by shareholders' funds. Using the information below for British Airways Group, calculate the debt/equity ratio for the first quarter of the year 2005 31st March 2005 2006 Long-term Debt (Pound Million) 4,045 3,602 Stockholders' equity (Pound Million) 1,397 2,074

2.90

The manager of Precision Airline, a two-plane passenger airline based out of Toledo, has requested that you conduct some operational analysis of the company. Both aircraft seats 50 passengers and they fly customers from Toledo to Washington, DC. Each aircraft makes four round-trip flights per week; the ticket price per passenger one-way is priced at $190. Using the cost information from the recent month's financial activity for the airline, the variable cost per passenger carried is estimated at $130. The fixed monthly cost for the company to operate is now at $150,000. Based on this information, the manager asks you to determine the minimum number of passengers each flight should have in order to cover all the monthly costs. Assuming each flight has to be operated, how many passengers should the airline transport per month to achieve this objective? Assume each month has four(4) weeks Provide your answer without a comma. Round your answer to the nearest whole number.

2500

Which of the following would not be part of the Background and Medicals process while trying to hire a new candidate

ANALYTICS TEST Medical test for pilots Credit Background Police Check

What are the advantages and disadvantages of flat-rate pricing in aviation maintenance?

Advantage is that maintenance workers increase productivity and quality of maintenance is increased. Disadvantage is that it may be difficult to obtain a flat-rate manual that adequately covers the type of aircraft being serviced.

As part of quality control, it is not recommended to have an aircraft technician inspect their own repair work.

True

Cash Flow tendency has been shifting towards the credit market/economy compared to previous years where most business operated with real cash

True

Charter Flight operations can occasionally be performed by scheduled air carrier such as airlines

True

Depending on the nature of the company, the manager might decide to reserve some roles and not delegate those to the other staff

True

During the budgeting processes, the business will have to prepare both Capital and Annual Operational Budgets

True

For flight operations that occur in the US, at least two categories of regulations have to be adhered; regulations pertaining the aircraft equipment (such as Title 14 Parts 119, 121, 135) and regulations pertaining to the training of the aircraft/crew personnel (such as Title 14 Parts 61, 65, 67)

True

General Aviation can serve as means of transport and also means of accomplishing an activity while in the air

True

Marketing covers four areas and one of them is the price of the product or service

True

One of applications of a Management Information Systems in a company is the ability to track the financial and marketing performance

True

One of the challenges facing the general aviation sector is the retaining of pilots as most of them continue up the rank into more sophisticated areas of aviation

True

One of the labor regulations which a manager will have to be aware when it comes to hiring and relating with employees is workplace safety

True

One of the main differences between a charter operation and an air taxi operation is the size of the aircraft used for the operation i.e. charter aircraft may vary from a large jet to a small single-engine one, while an air taxi aircraft is mostly a small to medium general aviation aircraft

True

One of the marketing strategies that FBO owners could take advantage of is the idea of enhancing the customer service and the visual appealing of the business

True

One of the ways aviation maintenance managers can prioritize on what inventory parts to purchase is by frequently reviewing the high failure items' list from the OEM.

True

Planning in Management is very crucial because is at this stage when the manager gets to develop the business plan

True

Sampling techniques have proven to be effective in aviation to help the managers obtain customers' opinion regarding the products and services

True

Setting up profit centers within the business means that each revenue-generating area of the business will be treated as its own mini-business.

True

Sport Pilot Certificate Program is one of the events that have encouraged more pilots to obtain their pilot certificates and be engaged with general aviation

True

The balance sheet is mainly made up of three main sections which are Assets, Liabilities, and Stockholders' Equity

True

The idea was 'Comparable Worth' was initiated after a study which revealed that women were being paid 20% less compared to men for doing the same/similar tasks

True

To measure aircraft productivity for scheduled air carriers (airlines), we can use the Available Seat Miles (ASMs) per day which is calculated using the following formula below: ASMs per day = No. of Departure x Average Flight Distance x No. of Seats If an airline wanted to increase the ASM per day, how would you advise them to increase each of these variables? a. Number of departures b.Flight distance c.Number of available seats

a. Decrease turn around time b. Change routes/ add new routes c. Change aircraft configuration/larger aircraft

In the hiring process, candidates may have to do some professional testing before they are hired by a business. a. Explain the difference between professional testing and other medical and background checks. b. Provide some examples in aviation

a. Professional testing tests candidates to see if they can complete tasks for which they will be hired to perform. Medical and background checks ensure that candidates meet health standards and have no criminal history. b. Examples of professional testing include: Testing via simulator and personality tests. Examples of Medical testing include: Pilot medical exams and criminal background checks.

Listed below are the challenges that impede the effectiveness of the flight operations in the aviation industry. For each of these, provide one situation or example a. Loss of access to certain airports and airspace b. Changes in airspace usage and regulations c. Changes in environmental regulations/trends d. Volatile customer base

a. Terrorism Impacts, TFRs b. Changes in Air Traffic Regulations due to technology, other international laws c. Exhaust emissions regulations, noise regulations, Airport curfew hours (San Diego Int Airport) d. Customer fluctuations, fuel price fluctuations, number of aircraft

List four areas that maintenance managers should consider to ensure effective quality control of the maintenance operations

training inspection rotation checklist recognize high quality work

Which of the following is not a requirement specified by the FAA concerning the certification of aircraft maintenance technician who is applying for a particular rating?

At least 18 years of age Able to read, write, speak, and understand English language SUCCESSFULLY COMPLETED A HIGH SCHOOL EDUCATION Has passed all the prescribed tests within a period of 24 months

Which of the following is not one of the sources of aviation forecasting data

Boeing Outlook AEROSPACE INDUSTRIAL FORECAST MAGAZINE Bureau of Transportation and Statistics FAA Forecast

Which of the following is not considered one of the main elements of communication?

CREATE Encoding Decoding Reception

___________ entry is the first accounting record of transactions that occur inside the business. It serves as a 'financial diary' in the business accounting systems

Cash flow JOURNAL Budget Payroll

Which of the following would not be considered as an air transportation flight operation?

Charter operation Scheduled air carrier operation AEROBATIC OPERATION Air cargo operation

Explain the differences between charter flight operations and air taxi operations?

Charter: Non Scheduled flight for passengers or cargo (the party receives an exclusive right of the aircraft), Variation of aircraft type from small single engine to large jet aircraft, Variation of aircraft type from small single engine to large jet aircraft Air taxi: Semi scheduled or non scheduled commercial, Light to medium aircraft type, Mostly operated in small communities where there is lack of scheduled commercial air services

Which of the following is not necessarily a specific data requirement to consider while establishing a data system for the business?

DATA AUTHORIZATION Data format Data Source Data adequacy

Which of the following would not qualify as an external source of finance for an organization?

DEFERRED TAXES Bank Loan Leasing Stocks

The largest internal source of funds for airlines is ______

DEPRECIATION Deferred taxes Profit Insurance vendor

In terms of finances, should the flight line department be operated as a cost center or a profit center. Why?

Depends on use. Corporate flight departments will use as a cost center. Airlines use flight line as a profit center. Maintenance can also be both a profit and cost center

Which of the position has to be incorporated into the organization structure of an air carrier that operates under Part 121?

Director of operations Chief pilot Director of maintenance DIRECTOR OF SAFETY

San Diego International Airport has established regular curfew prohibiting departing flight to take place between 11:30pm and 6:00am. What category of challenges that face flight operations would this incident fall into?

ENVIRONMENTAL LAWS Loss of access to airports and airspaces Financial challenges Challenges in airspace usage

Which of the following regulations cover the certification of the aviation maintenance technicians (airmen other than the flight crew members)

FAR Part 39 FAR Part 43 FAR PART 65 FAR Part 145

Briefly describe the advantage of FBOs to operate as corporate legal entities

FBOs that operate as corporate legal entities have better corporate legal protection than a sole proprietorship FBO. Corporation ownership is easily transferred.

Which of the following airline departments would not be considered as a line department but rather a staff department?

FLIGHT OPERATIONS Engineering & maintenance Marketing & sales Legal department

Which of the following services would not be categorized under flight line services?

FLIGHT PLANNING Aircraft marshalling Fueling Aircraft systems service

According to the regulations, aviation business can not partially outsource their maintenance operations/work. It is either they outsource all the maintenance operations, or they do not at all.

False

Break-Even Analysis is one of the best tools for ensuring that a company has a continuous cash flow at any time during a financial period

False

Cargo operations are only reserved for scheduled air carriers mainly because of the volume of cargo and the typical flight distances that are covered

False

For most business, the typical range for fringe benefits is between 5 to 10 percent of the basic employee salary

False

One of the advantages of registering a business as a sole proprietorship instead of partnership or corporation is the benefit of limited liability

False

Over time, the simulation of business scenarios has proven to not be effective to help the manager make effective decisions

False

Profit can also be described in terms of a rate of return. Rate of return is normally calculated as ratio of net profit to the total amount of sales done over the financial period.

False

The Equal Pay Act was establishing to help protect discriminating against employees who have some of disability

False

The National Transportation Safety Board (NTSB) is the primary regulatory and safety agency for the aviation industry

False

The income statement depicts the financial status of a business by showing both the operating account and the capital account

False

Using the "Human Resource Pipeline' concept, motivating is considered the last step in the relationship between the employee and the employer

False

When it comes to marketing, as long as a business has a solid plan and strategy there is no need to be marketing oriented

False

Briefly describe three advantages of having a business/management information system

Finance efficiency, records for budgeting, plan/have objectives, track metrics

Which of the following would not be useful in analyzing the business activities of a department?

Financial records Operating controls FILE CONTROL Budget

Which of the following commercial flight operations is considered to consist of one of the most thoroughly and tight controlled aviation activities in the US?

Fish spotting Aerial patrol AGRICULTURAL APPLICATION Aerial photography

In what ways can maintenance operations personnel interact with the flight operations personnel?

Flight operations personnel describe to maintenance personnel faulty/broken equipment which needs to be fixed. Maintenance personnel Inform flight personnel of work completed and give weight and balance information to cargo pilots

What are the types of organizational structures that we can implement in a business? How are these different from the types/forms of business organizations?

Functional or matrix management: Line Organization: Line and Staff: Structures are ways to organize employees, while types of businesses are ways to form a business depending on how complex of a business you need/how liable you want to be as business owner

Which one of these is not included in the FAA's definition of FBOs services?

Ground Transportation

Jaguar Aviation, a FBO company operating in the Amazon forest in Brazil, plans to engage in the community activities by donating $200,000 towards the building of a village hospital. To achieve that, the company is setting aside a portion of the profit obtained during the financial year 2019-2020 to donate towards the cause. What profit objective would be the best for the organization?

Non-Monetary Profit Maximum Profit Satisfactory Profit SOCIAL RESPONSIBILITY

John has been hired by Hannegan Aviation, a local FBO in Tasmania county. Upon his start date, John will have to undergo a three-day safety training, as part of his on-boarding process, to become familiar with the fueling operations and also to ensure the business complies with the Government regulations pertaining to fueling operations at airports. From the Organizational and Human Resource aspects, what type of training is this?

Promotional training ON-JOB TRAINING Advanced functions training Apprenticeship

A temporary (short-lived), interdepartmental groups is created to address a problem, or an idea through brainstorming analysis is called a

Quality circle Decision committee Social structure TASK FORCE

By utilizing data management system's concepts, we can establish a well organized accounting system for a business. Identify the elements that make up an accounting system. For each of the elements, briefly explain what they represent

Receipts- what you purchased Journal- records all financial transactions of a business General Ledgers- balance sheets occur first followed by income statements, put together Budget sheet- sees what it owns and how much it owes, dynamic Income statement- status of business operation for set financial period

Aircraft parts can be categorized into three groups for inventory control purposes/ Which of the following is not one of those categories?

Rotable Repairable Expendables FRAGILE

Once a job's final candidate is identified and formally hired, there are three types of training that he/she may have to go through while working for a business. List these trainings and briefly explain what their objectives are

Safety training (OSHA)- trains employees how to work safely and reduces workplace accidents Security- how to respond to various levels of threat and who to contact in an emergency. Finance- teach employees how to handle and manage money.

What are the three types/forms of business organizations?

Sole proprietorship Partnership/Limited Liability Corporation

Which of the following is not one of the four functions of management described in your textbook?

TIME MANAGEMENT Organizing Planning Controlling

One of the following is not involved with enforcing aviation regulations

TRANSPORTATION RESEARCH BOARD National Transportation Safety Board Federal Aviation Administration Transportation Security Administration

Which of the following is not one of the three areas of training discussed in the text

Training for the job that someone is hired for Training for advanced functions in the job Training to address economic, technical, or social changes ORIENTATION PROCESS

A Business with a good forecasting regression model will have to continue reviewing the model over time as the relationships among the variables may change

True

Aircraft operators are still expressing the need for cost-effective aircraft

True

As a manager you can have as many business plans for your product lines and/or services that you of plan to offer

True

Taylor Corporation is a pharmaceutical company based out of Wagagagigikoko county. The company has purchased two private jet aircraft to help the top management travel more efficiently. The company is working with a local FBO to be provided with pilots and cabin crew who will transport the executives whenever needed. What type of flight operation service is this?

Aircraft rental AIRCREW AND FERRY SERVICE Air taxi operation Charter flight operation

Explain the differences between aircraft rental service and aircrew/ferry services. What aviation businesses would be interested in acquiring aircraft/ferry services?

Aircraft rental service is when you rent an aircraft but operate the flight with your flight crew. Aircrew/ferry services is where you have an airplane, but rent the crew.

Public airports that are categorized as 'essential' are funded through what program of the Federal government?

Airports Improvement Program (AIP)

Which of the following is not considered as one of the phases of the financial process for a business organization

Controlling Justifying FORECASTING Planning

How can we utilize the management information system to establish operations' controls?

Controls can be placed to prevent overspending, shortage of supplies, and proper utilization of resources

Which of the following can be defined as "a general pattern of behavior, shared beliefs, and values that members have in common"

Corporate Philosophy ORGANIZATIONAL CULTURE Company span of control Company centralization

One area that an aviation manager can consider developing the employees is in on-job training. Provide three examples of areas where an aviation manager can provide on-job training for the employees

Customer services- how to relate with different customers (vendors, vistors, or internal) Safety-services like fueling require certain regulatory training Security- How to handle security emergencies and who to call

List five sources which an aviation manager can utilize while looking for job candidates

Industry Contacts Recruiters Employment agencies Colleges Job advertising

Which of the following indicator is used by the investors to determine whether or not the company is efficient in collecting its debts from the customers?

Interest Cover ACCOUNTS RECEIVABLE TURNOVER Debt-Equity Ratio Operating Margin

Economic Ordering Quantity (EOQ) helps to determine the most economical amount of inventory that we should order at a given time. Which of the following variables is not directly needed in order to calculate the EOQ value?

Inventory quantity Annual requirements MAINTENANCE REVENUE Acquisition cost

When it comes to directing and controlling, which one of these traits tends to be a problem for most managers?

Lack of Priorities POOR DELEGATION Poor Time Management Poor Communication

What is the difference between a 'line organization' and a 'line and staff organization'?

Line organization is for small companies, with everyone under the same department. Line and Staff is for larger companies, in which they employs additional experts to help with specific operations of the company

Briefly describe how the maintenance managers coordinate with the Original Equipment Manufacturers (OEMs) to help prioritize the inventory purchase for aircraft maintenance operations

Managers contact OEMs to determine high failure items and plan inventory purchasing based on predicted maintenance required

Airlines' management can be divided into three levels: top, middle, and operating. Which of these involves defining and objectives, procedures, and policies of the company?

Middle management TOP MANAGEMENT Operating management

Which of the following should we use when we are trying to price a product based on the amount of money we spent producing it?

Price-Based Value-Based Forecast-Based COST-BASED

When writing a business plan, the first thing to think about and write down would be your:

Product or Service

While airport operators can contract with various fuel vendors, they can also dedicate fuel services to a local FBO who will then provide fueling services to other airport customers. What is the advantage of having a FBO provide fuel operations to other tenants/aircraft owners at an airport?

The FBO will be responsible for fueling and control the quality and quantity of fuel