# Cost Accounting 301 Assignment 1

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College of Administration and Finance Sciences
Assignment (1)
Course Name: Cost Accounting
Student’s Name:
Course Code: ACCT 301
Student’s ID Number:
Semester: 2
nd
CRN: 25727
For Instructors Use only
Instructor’s Name: Dr. Youssef RIAHI
Level of Marks: High/Middle/Low

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College of Administration and Finance Sciences
Question No: Valuable Contribution by Strategy in Achieving Vision
A business must develop a mission statement and a vision to form a direction for business
strategy. Organizational vision communicates the business purpose and the core value principal to its
existence (OGC, n.d.). It plays a crucial role in providing a road map for formulating a business
strategy. It supports setting primacies and allocation of resources. It also ensures that everyone
within the organization works towards the common objectives. Hence, an organization's strategy
strives to achieve the business objectives, as described by the vision.
Business Strategy and Operating Plan of Flynas Airline
I chose to research Flynas airways to assess its business strategy and operating plans. Flynas
follows a cost-leadership strategy. The airlines aim to connect the world to Saudi Arabia. Its strategic
goals also aim to contribute to the realization of the aviation strategic plan and achieve the Saudi
vision of 2020 (Arab News, 2022). Another strategic goal is to provide an unmatched experience to
passengers at a lower cost. Flynas invested \$2.4 billion to purchase the latest aircraft to expand its
operations and connect long-haul destinations to Saudi Arabia. The new aircraft consuming fuel level
lower by 30% will also support their cost-effective services to customers. The company also plans to
target the Umrah market and attract tourists to transport rich experiences by offering new options.
Question No 2: Calculation Operating Leverage, Margin of Safety (Amount, Units, and
Percent)
1. Degree of operating leverage = CM/ Profit
CM = (Sale price Variable cost) x Units sold = (SAR350 SAR90) x 1800 = 468,000
Profit = CM Total fixed cost = 468,000 110,000 = 358,000
Operating Leverage = CM/ Profit = 468,000/358,000 = 1.31

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