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Volume 9, Issue 3

IMA Educational Case Journal
ISSN 1940-204X


John R. Ledgerwood, Embry-Riddle Aeronautical University
Tamilla Curtis, Embry-Riddle Aeronautical University
Anastassia Vilderson, Finnair Group

THIS CASE IS BASED ON A REAL SITUATION and covers aspects of unethical decision making practices in the airline industry. EastJet, an airline company based in eastern Europe is a small regional air carrier, struggling to achieve profitability in a limited niche market. EastJet’s executive team is expected to make significant cost cuts and show positive changes in the airline’s financial situation. Newly appointed Onboard Services Manager Emma Banks joins the company and discovers unethical practices related to catering cost calculations and tax evasion. Students are asked to analyze the ethical dilemma Emma faced and to assess possible outcomes based on the information provided in the case and class discussions.

Keywords: IMA Statement of Ethical Professional Practice, workplace ethics, airline industry, tax evasion
Scott McGregor, Fairleigh Dickinson University
TEXTBOOK QUESTIONS AND CASES OFTEN ASK STUDENTS to use differential analysis to evaluate one independent cost reduction action. But businesses often have multiple cost reduction alternatives to evaluate simultaneously. Furthermore, companies may consider these options independently or through combinations of alternatives. The case is based on an actual project to evaluate alternative cost reduction actions at a large insurance company. For educational purposes, the scope of the project has been significantly reduced to one function, the accounting department, to provide students with a realistic situation in a manageable format. Students are presented with three alternative cost reduction approaches and must identify the relevant costs and calculate the estimated potential impacts of each alternative. The cost reduction actions evaluated are outsourcing (“offshoring”), greater automation, and an office relocation. Additionally, the students must identify the risks and other nonfinancial considerations associated with the potential cost reduction actions and make a recommendation.
Keywords: relevant costs, differential analysis, cost reductions, outsourcing, relocation, automation.
Kathy Otero, Truman State University
Debra Kerby, Truman State University
Keith Harrison,Truman State University
THIS CASE PROVIDES A REALISTIC APPLICATION OF inflation-adjusted capital budgeting in a university setting. The case is designed for use in an upper-division cost accounting course or a graduate level cost/managerial accounting class. Students are required to analyze the costs of building and operating a student apartment complex, to determine a reasonable rental rate for three types of apartments, and to make a recommendation about the feasibility of the project. Critical thinking is emphasized in the development and interpretation of the present value (PV) model, identification and discussion of qualitative issues, and recognition and inclusion of uncertainty.
Keywords: capital budgeting, NPV, inflation, uncertainty, critical thinking, not-for-profit