# Acct 505

Pages: 3 (608 words) Published: March 12, 2013
Case Study: Springfield Express ACCT 505
Elizabeth R Mandes
Prof. Hany Faltas
January 27, 2013

Springfield Express
A. Break-Even Point in passengers and revenues per month:
Break-Even Point (Revenue) = Fixed Cost / Contribution Margin Ratio Contribution Margin Ratio = Price per Unit – Variable Cost per Unit / Price per Unit = \$160 - \$70 / \$160 = \$.56

Break - Even Point Revenue = \$3,150,000 / .56
= \$5,625,000 Break – Even Point (Passengers) = Break - Even Point Revenue / Full Passenger Fare = \$5,625,000 / 160 = \$35,156 B. Break – Even Point by number of passenger trains per month: Break – Even Point (Trains) = Break – Even Point (Passengers) / Seats per train car = \$35,156 / 90 = 391

Break – Even Point (Trains) = 391 Trains x Average Load Factor (70%) = 391 x 7 = 274 C. Monthly Break - Even Point in number of passenger cars:

Break – Even Point (Revenue) = 3,150,000 Fixed Cost / Contribution Margin Ratio Contribution Margin Ratio = \$190 - \$70 / \$190
= \$.63
Break - Even Point (Revenue) = \$3,150,000 / 63
= \$5,000,000 Break – Even Point (Passengers) = \$5,000,000 / \$190 (Passenger Fare) = \$26,316 passengers Break – Even Point (Trains) = 26,316 / 90

= 292 Trains 292 trains x 60% Average Load Factor = 175 Trains
Monthly Break – Even...