Managerial Accounting 505 Case Study Week 3 Free Essays

Evaluation 45/50 Managerial Accounting 505 Case Study Week 3 A. What is the make back the initial investment point in travelers and incomes every month? All out Per UnitPercent Sales: 160 X 90 $14,400$ 160100% Less factor costs/costs: . 70 X 90 $ 6,300 $7044% Contribution edge: $ 8,100$9056% Less fixed costs/cost: $3,150,000 Net working pay: $3,141,900 8,100/14,400 = 56% 100 †56 = 44% BEP in travelers (fixed expenses/commitment edge) 3,150,000/90 = 35,000 travelers BEP in dollars (traveler every month X selling cost) 35,000 X 160 = 5,600,000 B. We will compose a custom exposition test on Administrative Accounting 505 Case Study Week 3 or then again any comparable subject just for you Request Now What is the make back the initial investment point in number of traveler train vehicles every month? # of seats per traveler train vehicles X Average burden factor BEP in passenger’s vehicle every month 35,000/(90x. 70) 35,000/63 = 556 traveler train for every month C. On the off chance that Springfield Express raises its normal traveler passage to $190, it is assessed that the normal burden factor will diminish to 60%. What will be the month to month earn back the original investment point in number of traveler vehicles? Absolute Per UnitPercent Selling Price $17,100$190100 Less factor costs/expense$6,300$70 37 Contribution margin$10,800$12063 BEP in travelers (fixed expense/unit cm ) 3,150,000/120 = 26,250 BEP in travelers every month in dollars (fixed expenses/cm proportion) 3,150,000/. 63 = 5,000,000 # of seats for every traveler train vehicles X Average burden factor 90 X . 60 = 54 BEP # of travelers vehicles 26,250/(90 X . 60) 54 = 486 travelers train vehicles for every month D. Allude to unique information. ) Fuel cost is a critical variable expense to any railroad. In the event that unrefined petroleum increments by $ 20 for every barrel, it is assessed that variable expense per traveler will ascend to $ 90. What will be the new equal the initial investment point in travelers and in number of traveler train vehicles? BEP in travelers Fixed working expense/commitment edge 3,150,000/70 = 45,000 travelers for every month BEP # of travelers per vehicle 90x. 70 = 63 traveler for each vehicle Passengers every month/traveler train vehicles 45,000/63= 714 traveler train vehicles for each month E. Springfield Express has encountered an expansion in factor cost per traveler to $ 85 and an increment altogether fixed expense to $ 3,600,000. The organization has chosen to raise the normal charge to $ 205. On the off chance that the duty rate is 30 percent, what number of travelers every month are expected to produce an after-charge benefit of $ 750,000? Before charge benefit = after-charge benefit/100%-charge rate % 750,000/(1. 00-. 30)= $1,071,429 Before charge benefit + fixed cost/New commitment edge $,1,071,429 + $3,600,000/($205-$85) = $4,671,429/$120 = 38928. 56 or 38,929 traveler for each month. F. (Utilize unique information). Springfield Express is thinking about contribution a limited passage of $ 120, which the organization accepts would build the heap factor to 80 percent. Just the extra seats would be sold at the limited charge. Extra month to month publicizing cost would be $ 180,000. What amount pre-charge pay would the limited passage give Springfield Express if the organization has 50 traveler train vehicles for every day, 30 days out of every month? Revenue= 90 x (. 80-. 70) x 120 x 50 x 30 + $180,000 = $1,800,000 Variable cost= $70 x ($1,800,000/markdown passage ($120) = 1,050,000 Additional month to month promoting cost = $180,000 Revenue†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦$1,800,000 Less Variable cost†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦($1,050,000) Contribution Margin†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ $750,000 Less Advertising cost†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ ($180,000) Pretax salary rebate toll provide†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. $570,000 f# of limited seats = 90 X . 0 = 9 seats Contribution edge f or limited passages = $ 120 †$ 70 = $ 50 X 9 limited seats = $450 each train X 50 train vehicles for every day X 30 days for each month= $ 675,000 short $ 180,000 extra fixed expenses = $ 495,000 pretax pay. G. Springfield Express has a chance to acquire another course that would be voyage 20 times each month. The organization trusts it can sell seats at $ 175 on the course, however the heap factor would be just 60 percent. Fixed expense would increment by $ 250,000 every month for extra staff, extra traveler train vehicles, upkeep, etc. Variable expense per traveler would stay at $ 70. 1. Should the organization acquire the course? Revenue= 90 x (. 6) X $175ãâ€"20= $189,000 Variable cost= $70 x ($189,000/admission ($175) = $75,600 Additional month to month Fixed expense = $250,000 Revenue†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦$189,000 Less Variable cost†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦($75,600) Contribution Margin†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ $113,400 Less Fixed cost†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. ($250,000) Pretax pay loss†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã ¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. $136,000) The organization ought not go for the new course since they will lose cash on the grounds that the Total Additional Contribution Margin isn't Additional Fixed Costs 2. What number of traveler train vehicles must Springfield Express work to win pre-charge pay of $ 120,000 every month on this course? Before charge benefit + fixed cost/Contribution edge $120,000+$250,000/($175-$70) = 3,523. 81 or 3524 # of seats for each traveler train vehicles X Average burden factor 90 X . 0 = 54 Passengers for every month/traveler train vehicles 3524/54 = 65. 25 or 65 traveler train vehicles required 3. On the off chance that the heap factor could be expanded to 75 percent, what number of traveler train vehicles must be worked to gain pre-charge pay of $ 120,000 every month on this course? Before charge benefit + fixed cost/Contribution edge $120,000+$250,000/($175-$70) = 3,523. 81 or 3524 # of seats for each tra veler train vehicles X Average burden factor 90 X . 5 = 67. 50 Passengers for each month/traveler train vehicles 3524/67. 50 = 52. 20 or 52 traveler train vehicles required 4. What subjective variables ought to be considered by Springfield Express in settling on its choice about gaining this course? Whenever fixed cost expanded to $500,000 Fixed cost (25,000 X 2) = $500,000 = fixed expense + required benefit)/commitment edge per seat = (500000 + 120000)/61 = 62,0000/61 = 10164 Seats Seat value normal (131*10164) 1331484 Variable cost (70*10164) 711480 Contribution 620004 Fixed cost 500000 Income Fixed cost variable cost, commitment edge salary stacking components ought to be considered before taking choice. 4. Springfield ought to consider such things as †¢Connections to other Springfield prepares that may be made by these travelers. †¢Long-run potential for expanded burden factors †¢Increased client altruism in this new market †¢Increased work open doors for work in the region †¢Competition in the market. 120004 Step by step instructions to refer to Managerial Accounting 505 Case Study Week 3, Free Case study tests