Attachment # 00000636 - Case_Study_1_Week_3_Guidance.doc
Case_Study_1_Week_3_Guidance.doc (28.5 KB)
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Springfield Express is a luxury passenger carrier in Texas. All seats are first class, and the following data are available Number of seats per passenger train car 90 Average load factor (percentage of seats filled) 70 Average full passenger fare 160 Average variable cost per passenger 70 Fixed operating cost per month 3,150,000 Formula Revenue Units Sold Unit price Contribution Margin Revenue All Variable Cost Contribution Margin Ratio Contribution Margin/Selling Price Break Even Points in Units (Total Fixed Costs Target Profit )/Contribution Margin Break Even Points in Sales (Total Fixed Costs Target Profit )/Contribution Margin Ratio Margin of Safety Revenue - Break Even Points in Sales Degree of Operating Leverage Contribution Margin/Net Income Net Income Revenue Total Variable Cost Total Fixed Cost Unit Product Cost using Absorption Cost (Total Variable Cost Total Fixed Cost)/ of units Contribution margin per passenger Contribution margin ratio Break-even point in passengers Fixed costs/Contribution Margin Passengers Break-even point in dollars Fixed Costs/Contribution Margin Ratio Compute of seats per train car (remember load factor) If you know of BE passengers for one train car and the grand total of passengers, you can compute of train cars (rounded) Contribution margin Break-even point in passengers fixed costs/ contribution margin Passengers train cars (rounded) Contribution margin Break-even point in passengers fixed costs/contribution margin Passengers train cars ( rounded) Before tax profit less the tax rate times the before tax profit after-tax income Then, proceed to compute of passengers - of discounted seats Contribution margin for discounted fares X discounted seats each train X train cars per day X days per month minus additional fixed costs pretax income. 1. Compute Contribution margin Then, seats X X train cars Increased fixed cost ( ) Pretax gain (loss) on new route 2 and 3. Compute of passengers and train cars using computation approaches employed in some of the above problems. 4. Springfield should consider such things as (Think of qualitative factors that are important. In other words, not the numbers but other things that have to be considered, e.g., risks) Y, dXiJ(x( I_TS 1EZBmU/xYy5g/GMGeD3Vqq8K)fw9 xrxwrTZaGy8IjbRcXI u3KGnD1NIBs RuKV.ELM2fi V vlu8zH (W uV4(Tn 7_m-UBww_8(/0hFL)7iAs),Qg20ppf DU4p MDBJlC5 2FhsFYn3E69 45Z5k8Fmw- dznZ xJZp /P,)KQk5qpN8KGbe Sd17 paSR 6Q
accounting505

accounting505

Question # 00003655 Posted By: vbroughton73 Updated on: 11/17/2013 10:23 PM Due on: 11/17/2013
Subject Accounting Topic Accounting Tutorials:
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Springfield Express is a luxury passenger carrier in Texas.
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Case_Study_1_Week_3_Guidance.doc (28.5 KB)
Case_Study_1_Week_3-Instructions.doc (25.5 KB)
Case_Study_1_Week_3_Guidance_(1).doc (28.5 KB)
Tutorials for this Question
  1. neil2103
    Tutorial # 00003568 Posted By: neil2103 Posted on: 11/19/2013 07:20 PM
    Puchased By: 3
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    The solution of Case 2 Springfield Express...
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    Springfield_Express_case_v.doc (36.5 KB)
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