You have just been appointed the cost accountant for a new company called Amazing Joy Flights. In its first few years the company will provide three types of scenic flights: ‘Over and Around Melbourne, ‘Up the Yarra’, and ‘The Surf Coast’. Each takes a different length of time, involves different flight crews and different food and (sometimes very expensive) beverages.
1. Explain the processes that you will undertake to develop standard costs for material and labour. Make sure that your answer is specific to the company and to the services that are being offered.
2. Outline how the company management would use these standard costs. Once again, make sure your answer is specific to the particular company?