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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 What is the break-even point in passengers and revenues per month What is the break-even point in number of passenger train cars per month If Springfield Express raises its average passenger fare to 190, it is estimated that the average load factor will decrease to 60 percent. What will be the monthly break-even point in number of passenger cars (Refer to original data.) Fuel cost is a significant variable cost to any railway. If crude oil increases 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 train cars Springfield Express has experienced an increase in variable cost per passenger to 85 and an increase in total fixed cost to 3,600,000. The company 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 profit of 750,000 (Use original 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 seats 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 day, 30 days per month Springfield Express has an opportunity to obtain a new route that would be traveled 20 times per month. The company believes it can sell seats at 175 on the route, 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. Should the company obtain the route How many passenger train cars must Springfield Express operate to earn pre-tax income of 120,000 per month on this route 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 What qualitative factors should be considered by Springfield Express in making its decision about acquiring this route 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)
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  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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