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 a. What is the break-even point in passengers and revenues per month? Contribution Margin/Passenger = 160 -70 Contribution margin ratio = 160- 70/ 160 Break Even Points in Units = (Total Fixed Costs + Target Profit )/Contribution Margin Break-even for passengers: (3,150,000 + 0) / (160-70):35000 Break Even Points in Sales = (Total Fixed Costs + Target Profit )/Contribution Margin Ratio Break-even for revenues: (3,150,000 + 0)/ (90/160): $5,600,000 b. What is the break-even point in number of passenger train cars per month?
(TCO A) On March 1, 2010, Ruiz Corporation issued $800,000 of 8% nonconvertible bonds at 104, which are due on February 28, 2030. In addition, each $1,000 bond was issued with 25 detachable stock warrants, each of which entitled the bondholder to purchase for $50 one share of Ruiz common stock, par value $25. The bonds without the warrants would normally sell at 95. On March 1, 2010, the fair market value of Ruiz's common stock was $40 per share and the fair market value of the warrants was $2.00. What amount should Ruiz record on March 1, 2010 as paid-in capital from stock warrants?
New contribution margin = $70 Break-even point in passengers = fixed costs/contribution margin Passengers = 45,000 Train cars = 715 e) Springfield Express has experienced an increase in variable cost per passenger to $ 85 and an increase in total fixed cost to $ 3,600,000. The company has decided to raise the average fare to $ 205. If the tax rate is 30 percent, how many passengers per month are needed to generate an after-tax profit of $ 750,000? Before Tax Needed Profit = $1,071,428.57 Before Tax Needed Contribution Margin = $4,671,428.57 Contribution Margin per Customer = $120 Number of Customers Needed = 38,928.57 Whole Number of Customers Needed = 38,929
Case Study 2 Solution 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 Contribution margin per passanger = $90 Break even point per passanger = $35,000 35000 Contribution margin ratio= $2 Break even point in dollars = $5,600,000 5600000 b. What is the break even point of passenger train cars per month 63 Compute # of seats per train car(remember load factor?) 555.5555556 Number of train cars rounded 556 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 the monthly break even point in the number of passenger cars?
* The current ratio = Current asset/Current liabilities Current ratio 2007 = $215,180/$126,250 =1.70 to 1 Current ratio 2008 = $324,120/$162,300 = 2.00 to 1 Between the years of 2007 and 2008, the current ratio increased. In the year, 2007 Heavy Duty Tractors had $1.70 of assets for every dollar of liabilities. In 2008, they had $2.00 of assets for every dollar of liabilities. * Quick ratio = (Cash + Market Securities +Current Receivables)/ Current liabilities Quick ratio 2007 = ($24,980 +$0 + $84,120)/$126,250 = 0.86 to 1 Quick ratio 2008 = ($48,500 +$3,750 + $128,420)/$162,300 = 1.11 to 1 This ratio also increased between the years of 2007 and 2008. For the year 2007 the ratio was less than 1 meaning it needed to liquidated it marketing securities in that year, to pay bills.
A commitment was made for 29 of the 47 luxury suites in the new ballpark at prices from $600,000 and $800,000 and will have a 74 seat club which would be priced at $700 per ticket. For ordinary seats, the club would send out a relocation plan. There would be about 11000 non-premium seats at field level and 12000 at the main level. In the final season of the current stadium, the team had 162 legend seats priced at $1000 a game. Behind that are 3000 Field Champion seats, which were sold for $250 a game this year as part of seasons tickets.
ASX & Media Release Thursday 12 September 2013 Myer Full Year Results ending 27 July 2013 Full year total sales up 0.8 percent to $3,145 million Operating gross profit up 1.8 percent to $1,312 million Operating gross margin up 40 basis points to 41.7 percent Net profit after tax down 8.7 percent to $127 million Full year dividend of 18 cents, fully franked FY2013 Financial Highlights Sales Total sales up 0.8% to $3,145 million, up 0.4% on a comparable store sales basis Myer Exclusive Brands sales up $40 million to 20.0% of sales, Concessions up $18 million to 15.4% of sales Operating gross profit Operating gross profit up 1.8% to $1,312 million Operating gross profit margin up 40 basis points (bps) to 41.7% Earnings Cost of doing
Labor hours 20,000 The labor productivity (in hours) for Limited car: Units sold = 6,000 = 0.2 units per labor hour. Labor hours 30,000 The labor productivity (in dollars) for Deluxe car: Units sold * price/unit = 4,000 x 8,000 = 32,000,000 = 133.33 dollar per labor hour Labor hours * labor salary/hour 20,000 x 12 240,000 The labor productivity (in dollars) for Limited car: Units sold * price/unit = 6,000 x 9,500 = 57,000,000 = 135.71 dollar per labor hour Labor hours * labor salary/hour 30,000 x 14 420,000 Conclusion: For Deluxe car: on average, for every dollar the car manufacturer has spent, they get 132,33 dollar in return. While the units produced for every labor hour are 0.2 units. We could conclude that the car manufacturer makes huge profit for making Deluxe car. If we measure labor productivity in terms of units/hour, there will be quite enough important factors that we do not consider, such as the quality of the car (the selling price) and the skill level of the labors.
Managerial Accounting Springfield Express Case Study 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 a. What is the break-even point in passengers and revenues per month? The break-even point in passengers and revenues is calculated below: $3,150,000 / 90 = 35,000 are the break-even point in passengers per month. 90 / $160 = 0.562556.25% $3,150,000 / 0.5625 = $5,600,000 is the break-even point in revenue per month.
The major networking airlines in the industry are united, Northwest, American Continental, and Delta. Their combined revenue in 2005 made up of about 82 percent of the total $25.3 billion revenue generated by the 10 largest airlines. Low-cost carriers operate at a low-cost business model, they use the point-to-point flight system. the largest carrires in the model are Southwest and JetBlue. Regional carriers specialized in short-haul flights that caters to small towns and communities using small jets.