Sase study Essay

What is the break-even point in riders and revenues per calendar month? First we have to figure come forth the donation Margin = Sales per fare variable expense per unit of vizorment $160.00 $70.00 = $90.00 (Contribution Margin. Break Even point in passengers= Fixed address (divided) contribution Margin $3,150,000 / $90 = 35,000 passengers. Break-even point in revenues per month = Fare sales to breakeven (X) Sales per unit. 35,000 x $160 = $5,600,000What is the break-even point in number of passenger educate cars per month? At 70% load = 90 x 70% = 63 Breakeven point in passengers = 35,000/63 = 556 cars c) If capital of Illinois verbalize raises its average passenger fare to $ 190, it is estimated that the average load factor go away decrease to 60 percent. What will be the monthly break-even point in number of passenger cars? 90 position x 60% = 54 Contribution Margin = $190 $70 = $ great hundred Fixed equals $3,150,000/ $long hundred = 26250 Passengers 26250/54 = 486 carsd) (Refer to certain data.) Fuel cost is a crucial variable cost to any railway. If crude oil affixs by $ 20 per barrel, it is estimated that variable cost per passenger will rise to $ 90. What will be the new break-even point in passengers and in number of passenger rent cars? Contribution margin = ($160 $90) = $703,150,000/70 = 45,000Breakeven point in number of passenger cars per month9070% = 6345,000/ 63 = 714 carse) capital of Illinois Express has experienced an increase in variable cost per passengers to $ 85 and an increase in total fixed cost to $ 3,600,000. The participation has decided to raise the average fare to $ 205. If the tax rate is 30 percent, how many passengers per month are needed to generate an after-tax hit of $ 750,000? impudently Contribution Margin $205- $85 = $120.00 winnings=after tax profit/tax rate = $750,000x 70% = $1,071,429 Breakeven pointin passengers =$3,600,000 + $1071.429 = $4,671,429 (divided) $120 (CM) = 38,929 Passengersf). (Use o riginal data). Springfield Express is considering offering a discounted fare of $ 120, which the company believes would increase the load factor to 80 percent. Only the additional set would be sold at the discounted fare. Additional monthly advertising cost would be $ 180,000. How much pre-tax income would the discounted fare provide Springfield Express if the company has 50 passenger train cars per twenty-four hour period, 30 days per month? CM= $120 $70 = $50Load Factor = 80% 70% = 10%Additional Rider CM = 50 cars x 90 seats x 10% = 450Per day Revenue$160 x 3150 = $504,000 + $54,000 ($120 x 450) = $558,000Variable cost per day 70 x 3,600 (total seats) = $252,000Per day income $558,000 $252,000 = $306,000 x 30 days = $9,180,000 Profit = $9,180,000 $3,150,000 $180,000 (addtl. monthly advertising cost) = $5,850,000.g). Springfield Express has an opportunity to obtain a new road that would be traveled 20 times per month. The company believes it female genitals sell seats at $ 175 on the way, but the load factor would be only 60 percent. Fixed cost would increase by $ 250,000 per month for additional personnel, additional passenger train cars, maintenance, and so on. Variable cost per passenger would remain at $ 70. CM = $175 $70 = $ one hundred fiveNumber of passengers x load factor = 90 x 60% = 54CM per ride ($175 $70) = $ one hundred five x (90 x 60% load) 54 = $5670 x 20 rides = $113,400 (per month) 1. Should the company obtain the route?I dont think it would be profitable unless we can increase the number of passengers a month for this route in parade to break even 2. How many passenger train cars must Springfield Express operate to earn pre-tax income of $ 120,000 per month on this route? Profit = CM x Q fixed expenses$175x $70x $250,000 = $120,000$105x = $370,000X = 3,5243524/54 = 65 train cars3). If the load factor could be increased to 75 percent, how many passenger train cars must be operated to earn pre-tax income of $ 120,000 per month on this route? CM = $10590 x 75% = 67.567.5 x $105 x 20 cars = $141,750$175 $70 = $105$105 = $370,000 ($250,000 + $120,000)3,524 passengers3,524/67.5 = 52 trains4) What qualitative factors should be considered by Springfield Express in qualification its decision about acquiring this route? Considerations in decision make in addition to the qualitative or financial factors highlighted by additive analysis. They are the factors relevant to a decision that are difficult to measure in terms of money. Qualitative factors may include effect on employee morale, schedules and other elements, relationships with and commitments to suppliers, effect on present and future suppliers and effect on present and future customers.