CAM Business Management 2

Question 1

A flight department manager preparing an annual budget wants to account for engine overhauls that occur every 3,000 flight hours. Which budgeting approach best handles this expense?

Accepted Answer

Accrue a reserve per flight hour so funds accumulate toward the overhaul

Answer

Hourly maintenance reserves spread large, usage-driven costs evenly across operating periods, matching expense to utilization.

Question 2

In a SWOT analysis for a corporate flight department, a competitor charter operator lowering its rates would be classified as which element?

Accepted Answer

Threat

Answer

External factors that could harm the organization, such as competitive pricing pressure, are threats in SWOT analysis.

Question 3

Which financial statement would an aviation manager review to determine whether the flight department generated enough cash to cover a hangar lease payment this quarter?

Accepted Answer

Cash flow statement

Answer

The cash flow statement shows actual cash inflows and outflows, which determines the ability to meet payment obligations.

Question 4

A flight department's fixed costs are $1.2 million per year and variable costs are $2,000 per flight hour. If the internal chargeback rate is $5,000 per hour, how many hours must be flown to break even?

Accepted Answer

400 hours

Answer

Break-even equals fixed costs divided by contribution margin: $1,200,000 divided by ($5,000 minus $2,000) equals 400 hours.

Question 5

When benchmarking a flight department against peer operations, which metric best measures aircraft utilization efficiency?

Accepted Answer

Flight hours flown per aircraft per year

Answer

Annual flight hours per aircraft directly measures how intensively each asset is being used relative to peers.

(CAM) Certified Aviation Manager Practice Test

(CAM) Certified Aviation Manager Practice Test

CAM Business Management 2