Acct 504

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

a. What is the break-even point in passengers and revenues per month?

BP in PassengersFC/CM

BP in Passengers3,150,000/ (160-70)

BP in Passengers35,000

BP in RevenueBP in Passengers*Average Full Passenger Fare

BP in Revenue35,000 Passengers*160

BP in Revenue5,600,000

b. What is the break-even point in number of passenger train cars per month?

CM (9070%)905,670

BP in Passenger CarsFC /CM

BP in Passenger Cars3,150,000/5,670

BP in...