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? Complete 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 salary: $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 article test on Administrative Accounting 505 Case Study Week 3 or on the other hand any comparative theme 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 toll to $190, it is assessed that the normal burden factor will diminish to 60%. What will be the month to month make back the initial investment point in number of traveler vehicles? All out 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 each 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 each month D. Allude to unique information. ) Fuel cost is a noteworthy variable expense to any railroad. On the off chance that raw petroleum increments by $ 20 for every barrel, it is evaluated that variable expense per traveler will ascend to $ 90. What will be the new earn back the original 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 each month BEP # of travelers per vehicle 90x. 70 = 63 traveler for every 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 an d an increment altogether fixed expense to $ 3,600,000. The organization has chosen to raise the normal charge to $ 205. In the event that the assessment rate is 30 percent, what number of travelers every month are expected to create 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 every month. F. (Utilize unique information). Springfield Express is thinking about contribution a limited toll of $ 120, which the organization accepts would expand the heap factor to 80 percent. Just the extra seats would be sold at the limited passage. Extra month to month promoting cost would be $ 180,000. What amount pre-charge pay would the limited toll give Springfield Express if the organization has 50 traveler train vehicles for each 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 publicizing 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 for limited tolls = $ 120 †$ 70 = $ 50 X 9 limited seats = $450 each train X 50 train vehicles for every day X 30 days for every month= $ 675,000 short $ 180,000 extra fixed expenses = $ 495,000 pretax salary. 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 work force, 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 in light of the fact that the Total Additional Contribution Margin isn't Additional Fixed Costs 2. What number of traveler train vehicles must Springfield Express work to gain pre-charge salary 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 each month/traveler train vehicles 3524/54 = 65. 25 or 65 traveler train vehicles required 3. In the event that the heap factor could be expanded to 75 percent, what number of traveler train vehicles must be worked to gain pre-charge salary 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 e very traveler train vehicles X Average burden factor 90 X . 5 = 67. 50 Passengers for every month/traveler train vehicles 3524/67. 50 = 52. 20 or 52 traveler train vehicles required 4. What subjective elements ought to be considered by Springfield Express in settling on its choice about obtaining 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 pay stacking elements 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-extend potential for expanded burden factors †¢Increased client generosity in this new market †¢Increased business open doors for work in the territory †¢Competition in the market. 120004 Step by step instructions to refer to Managerial Accounting 505 Case Study Week 3, Free Case study tests