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Case Study 2 Acct 505

In: Business and Management

Submitted By mrmarcuscarter
Words 960
Pages 4
Case Study 2 - Marcus Carter - Week 3

A:

Average full passenger fare $160
Less: Average variable cost per passenger $(70)
Contribution Margin per passenger $90 Contribution Margin = Per Passenger fare - Variable cost per passenger
Contribution Margin ratio 56.25% Contribution Margin Ratio = Contribution Margin Per Passenger / Average full passenger fare x 100

Fixed operating cost per month $3,150,000

Breakeven point in passengers 35,000 Breakeven point in passengers = Fixed operating cost per month / Contribution Margin per passenger
Breakeven point in revenue $5,600,000 Breakeven point in revenue = Fixed operating cost per month / Contribution Margin ratio

B:

Breakeven point in passengers per month 35,000
Number of seats per passenger train car 90

Total train car needed 388.89 Total Cars Needed = Breakeven point in passengers per month / Number of seats per passenger train car
At Average load factor (percentage of seats filled) 70%
Break-even point in number of passenger train cars per month 556 Break-even point in number of passenger train cars per month = Total train cars needed / Load factor

C:

Average full passenger fare $190
Less: Average variable cost per passenger $(70)
Contribution Margin per passenger $120 Contribution Margin = Per Passenger fare - Variable cost per passenger
Contribution Margin ratio 63.16% Contribution Margin Ratio = Contribution Margin Per Passenger / Average full passenger fare x 100

Fixed operating cost per month $3,150,000

Breakeven point in passengers 26,250 Breakeven point in passengers = Fixed operating cost per month / Contribution Margin per passenger
Number of seats per passenger train car 90

Total train car needed 291.67 Total Cars Needed = Breakeven point in passengers per month / Number of seats per passenger train car
At…...

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