Question Details

ACCT 505
WEEK 3
Case Study 1
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

FIND
Break-even point in passengers 
Break-even point in dollars 
= 35,000 / 63 = 556 train cars

a.	Compute # of seats per train car (remember load factor?) = 90 x 70% = 63 passengers per train car
the before tax profit 
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.