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Financial Analysis and Break-Even Calculations for Springfield Express: A Case Study in Luxury Passenger Transportation

Description: This case study analyzes financials and break-even points for a luxury transportation company.

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    Financial Analysis and Break - Even Calculations for Springfield Express: A Case Study in Luxury Passenger Transportation 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 Formula : Revenue = Units Sold * Unit price Contribution Margin = Revenue – All Variable Cost Contribution Margin Ratio = Contribution Margin/Selling Price Break Even Points in Units = (Total Fixed Costs + Target Profit )/ Contribution Margin Break Even Points in Sales = (Total Fixed Costs + Target Profit )/ Contribution Margin Ratio Margin of Safety = Revenue - Break Even Points in Sales Degree of Operating Leverage = Contribution Margin/Net Income Net Income = Revenue – Total Variable Cost – Total Fixed Cost Unit Product Cost using Absorption Cost = (Total Variable Cost + Total Fixed Cost)/# of units a. Contribution margin per passenger =? Co ntribution margin ratio =? Break - even point in passengers = Fixed costs/Contribution Margin = Passengers =? Break - even point in dollars = Fixed Costs/Contribution Margin Ratio = $ ? b. Compute # of seats per train car (remember load factor?) If you know # of BE passeng ers for one train car and the grand total of passengers, you can compute # of train cars (rounded) = ? c. C ontribution margin =? Break - even point in passengers = fixed costs/ contribution margin P assengers =? train cars (rounded) =? d. Contribution margin =? Break - even point in passengers = fixed costs/contribution margin Passengers =?

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