Coastal Airlines Has a Significant Presence at the San Jose

question 60

Multiple Choice

Coastal Airlines has a significant presence at the San Jose International Airport and therefore operates the Emerald Club, which is across from gate 36 in terminal 1. The Emerald Club provides food and business services for the company's frequent flyers. Consider the following selected costs of Club operation:
1) Receptionist and supervisory salaries
2) Catering
3) Terminal depreciation (based on square footage)
4) Airport fees (computed as a percentage of club revenue)
5) Allocated Coastal administrative overhead
Management is exploring whether to close the club and expand the seating area for gate 36. Which of the preceding expenses would the airline classify as unavoidable?

• A) 3.
• B) 4.
• C) 5.
• D) 3, 5.
• E) None of the answers are correct.

---

Definitions:

Assignment

The transfer of rights or property from one party to another.

Delegation

The act of assigning responsibility or authority from one person or group to another.

Creditor Beneficiary

is a third party that benefits from a contract wherein the promisor agrees to pay the promisee's debt to the third party.

Incidental Beneficiary

An incidental beneficiary is a third party who may benefit from a contract between two other parties, even though the benefits were not directly intended for them.