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# Case Study II - \$90 Let Q = Break-even point in passengers...

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Case Study II (1) Selling Price …………………… \$160 Variable Expenses…………….. 70 Contribution margin …………... \$90 Let Q = Break-even point in passengers Sales = Variable expenses + Fixed expenses + Profits \$160Q = \$70Q + 3,150,000 + 0 \$90Q = \$3,150,000 Q = \$3,150,000 / 90 Q = 35,000 passengers In sales revenue = 35,000 x \$160 = \$5,600,000 (2) Number seat per train……………….. 60 Average Load………………………… 70% (42) No. of Passengers train cars per month = 90 x .7 = 63 = 35,000 / 63 = 556 No. of passenger (3) Passenger fare increase ………………….. \$190 Let X = Break-even point 190X = 70X + 3,150,000 120X = 3,150,000 X = 3,150,000 / 120 X = 26,250 passengers Average load decrease ………………….. 60% No. of Passengers train cars per month = 90 x .6 = 54 = 26,250 / 54 = 486 No. of passenger (4) Variable cost increase to………………….

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Unformatted text preview: \$90 Let Q = Break-even point in passengers Sales = Variable expenses + Fixed expenses + Profits \$160Q = \$90Q + 3,150,000 + 0 \$70Q = \$3,150,000 Q = \$3,150,000 / 70 Q = 45,000 passengers No. of Passengers train cars per month = 90 x .7 = 63 = 45,000 / 63 = 714 No. of passenger (5) Variable cost increase to……………………. \$85 Total Fixed cost……………………………… \$3,600,000 Average Fare ………………………………… \$205 After tax profit ………………………… 750,000 Let y = profit Y = 0.3y = 750,000y Y = 1,071,429 Now, 1,071,429 = 205X + (85X + 3,600,000) 205X = 85X + 4,671,429 120X = 4,671,429 X = 4,671,429 / 120 X = 38928 passenger No. of Passengers train cars per month = 90 x .7 = 63 = 38928 / 63 = 617 No. of passenger...
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Case Study II - \$90 Let Q = Break-even point in passengers...

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