Final answer:
A service company does not include Cost of Goods Sold (COGS) on its financial statements. Airlines common activity bases are the number of passengers and the number of miles flown, and these provide insights into operational efficiencies.
Step-by-step explanation:
1. A service company does not have Cost of goods sold (COGS) on its financial statements. COGS is associated with companies that sell physical goods; as service companies do not sell physical products, they do not have costs directly associated with producing goods.
2. Common activity bases used by an airline are the number of passengers and the number of miles flown. These metrics assist airlines in determining efficiency and operational performance.
When considering airline quality and performance, caution should be exercised in assessing complaint numbers as they may not be reflective of the true quality if not compared with the volume of passengers. Moreover, airlines would be interested in the consistency of the number of babies on flights to ensure sufficient safety equipment is available. Additionally, competitive practices such as price slashing must be evaluated in the context of market dynamics and competitive strategies within the airline industry.