Michael O’Leary has appointed you as the new Management Accountant for Ryan Air. Considering the increased competition for air travel and the volatility of oil prices, you were asked to advise the Board of Directors on a number of issues in order to inform decisions which would support RyanAir’s future growth. Please ensure that your report is informed by RyanAir’s strategy and business model (please check company website and Annual Report for this information).
Produce a management report to the Board of Directors outlining the following:
1. Discuss the advantages and disadvantages of Activity Based Costing (ABC) and critically evaluate whether it would be suitable for RyanAir;
2. Develop a Balanced Scorecard for RyanAir and critically evaluate how (whether) it could be used to support future growth;
3. Recommend a type of budget (ie incremental, flexible, ABB etc.) that you believe is the most appropriate for RyanAir. Provide arguments to support your recommendations.