The Inventory Costs for Airlines Is High Because They

question 302

Multiple Choice

The inventory costs for airlines is high because they

• A) use a straight salary compensation plan for the large numbers of flight attendants.
• B) have high-salaried pilots and very expensive equipment.
• C) allow baggage personnel to work overtime.
• D) decrease the number of workdays per week, but increase the hours per day.
• E) use a commission compensation system for their reservationists.

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Definitions:

Net Sales

The total revenue from sales after deducting returns, allowances for damaged or missing goods, and any discounts allowed.

Accounts Receivable Turnover

A financial metric that measures how often a company collects its average accounts receivable within a specified period, indicating the efficiency of credit and collections.

Total Sales

The aggregate revenue a company generates from selling its goods or services within a specific period.

Direct Write-off Method

A method of accounting for bad debts where specific uncollectible accounts receivable are directly written off against income at the time they are deemed to be uncollectible.