# Springfield Express Case Study

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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. b. What is the break-even point in number of passenger train cars per month? The break-even point in number of passenger train cars per month is calculated below: 90 * 70% = 63 is the break-even average passenger per car. 35,000 / 63 = 555.55 556 is break-even point in number of passenger train cars per month. 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? To find the monthly break-even point in number of passenger cars if Springfield Express raises its average passenger fare to \$190.00 and the estimation that the average load factor will decrease to 60%, the following calculation is provided: \$3,150,000 / \$120.000 = \$26,250 is the break-even in passengers. 90 / 60% = 54 is the average passenger per car. \$26,250 / 54