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# Case Study 2

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"                                                 Case Study II
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 car 90                                                                                                                             Avg load factor is 70%                                                                                                                                                                 Avg full passenger fare \$160                                                                                                                                       Avg variable cost per passenger \$70.00                                                                                                                 Fixed operating cost per month \$3150000
"
a. What is the break-even point in passengers and revenues per month?
Brak even   in passengers 35000
Break even in \$ 5600000
b. What is the break-even point in number of passenger train cars per month?
Average passenger per car 63

Break even in train cars 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
Brean even in passengers 26250

Average passenger per car 54

Break even in train cars 486 train cars

d.   fuel cost is a significant variable cost to any railway. If crude oil increases by \$ 20 per barrel, it is estimated that variable cost per passenger will rise to \$ 90. What will be the new break-even point in passengers and in number of passenger train cars?
Break even in passengers 39375

Average passenger per car 63

Break even in train cars 625 train cars

e. Springfield Express has experienced an...

• Submitted by: romerop
• on February 19, 2012
• Length: 604 words
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• Popularity Rank: 72127
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