ACCT505-Case Study 2 - Nikki Owen Case Study 2...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Nikki Owen Case Study 2 07/26/2012 ACCT505-Managerial Accounting Professor Anita Wibbert A. What is the break-even point in passengers and revenues per month? (1) Per passenger Sales..… $160 Variable Expenses………….$70 Unit Contribution Margin…………….$90=$60-$70 Fixed expenses/ Unit Contribution Margin=$3,150,000/$90=35,000 passengers in break-even point (2) Contribution Margin Ratio (CM Ratio)= Contribution Margin/Selling Price=$90/$160=0.5625 Break-even point in dollars=Fixed Costs/Contribution Ratio=$3,150,000/0.5625=$5,600,000 B. What is the break-even point in number of passenger train cars per month? Number of seats per train car= Average load factor x Number of seats per train car=0.70 x 90=63 passengers per train on average Passengers in break-even point/ Number of seats per passenger train=Number of passenger train cars per month to break-even= 35,000/63=555.5 0r 556 train cars C. 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? Number of seats per train car=Average load factor x Number of seats per train= 0.60 x 90= 54 passengers per train on average Per unit Sales……………$190 Variable Expenses……………$70 Unit Contribution Margin………………….$120=190-70
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern