Number of seats 90 average load factor 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? Passengers 35,000 and the Revenue is $5,600,000
B) What is the break-even point in number of passenger train cars per month? Passenger train cars are 556.
C) If Springfield Express raises it average passenger fare to $190, it is estimated that the average load factor will decrease to 60%. What will be the monthly break-even point in number of passenger cars? Passenger train cars would be 648
D)

Calculations contribution margin per passenger =passenger fare $160 - variable cost per passenger $70 $90
Contribution margin per unit is the difference between the selling price per unit and the variable cost per unit. Breaking -even point in units (tickets sold) = Fixed costs $3,150,000 / Contribution margin per unit $90 35,000. Break-even point in dollars = Fixed costs $3,150,000 / Contribution margin ratio .5625 $5,600,000. Contribution margin ratio = unit contribution margin $90/ unit selling price $160 0.5625. Contribution margin ratio is the portion of a unit's selling price that exceeds total unit variable cost.

Average number of passengers per car = seats 90 x average seats filled (load factor) 70% 63
Number of cars needed to transport passengers per month = total passengers 35000/number of passengers per car 63 556

Contribution margin per passenger = passenger fare $190 - variable cost per passenger $70 120 break-even point in units = Fixed costs $3,150,000 / Contribution margin per unit $120