Aussie Trainlink runs passenger trains in Australia Some of the trains are suburban, while there are a number of long distance and interstate services One such train is the Melbourne Sydney XPT The XPT runs twice daily in both directions A one way run from Melbourne to Sydney, or vice versa, is referred to as a service Therefore, the Melbourne Sydney XPT runs four services daily The following costs apply Line access fee $1,500 per service Fuel $7,500 per service Passenger processing fee (eg checking tickets, boarding support etc) $10 per passenger Catering $20 per passenger Cleaning and cabin presentation $750 per service Crewing costs $8,000 per day Other costs $1,000 per service The train can carry up to 250 passengers and the normal ticket price is $200 per person What is the daily break even quantity and break even quantity per service What will the total contribution margin ($) and margin of safety (in units) be if there are 170 people on board a service If a service has 120 on board and AussieTrainlink pays a 10 commission on HALF the tickets sold, what net profit will be generated Assume a tax rate of 25 and a commission of 10 What price is required to make a profit of $3,000 if 130 passengers are expected on a given service Aussie Trainlink is considering investing $300,000 in a marketing campaign It anticipates the campaign will result in an additional 5 to 10 passengers per service over a 90 day period Should Aussie Trainlink proceed with the marketing campaign Why CHALLENGE QUESTION Suppose Aussie Trainlink wishes to introduce a first class travel option This will involve additional fixed costs of $8,000 per day, and an additional per passenger cost of $95 per first class passenger Aussie Trainlink believes it can sell a first class fare for $365 and expects 12 5 of passengers will opt for first class How many regular passengers and how many first class passengers are required for Aussie Trainlink to make a profit of $12,000 per service How much revenue will be earned from regular passengers and first class passengers when profit is $12,000 per service

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 09, 2024

Aussie Trainlink runs passenger trains in Australia. Some of the trains are suburban, while there are a number of long-distance and interstate services. One such

Aussie Trainlink runs passenger trains in Australia. Some of the trains are suburban, while there are a number of long-distance and interstate services. One such train is the Melbourne-Sydney XPT. The XPT runs twice daily in both directions. A one-way run from Melbourne to Sydney, or vice versa, is referred to as a service. Therefore, the Melbourne-Sydney XPT runs four services daily.

The following costs apply:

Line access fee: $1,500 per service
Fuel: $7,500 per service
Passenger processing fee (eg. checking tickets, boarding support etc): $10 per passenger
Catering: $20 per passenger
Cleaning and cabin presentation: $750 per service
Crewing costs: $8,000 per day
Other costs: $1,000 per service

The train can carry up to 250 passengers and the normal ticket price is $200 per person.

What is the daily break-even quantity and break-even quantity per service?
What will the total contribution margin ($) and margin of safety (in units) be if there are 170 people on board a service?
If a service has 120 on board and AussieTrainlink pays a 10% commission on HALF the tickets sold, what net profit will be generated?
Assume a tax rate of 25% and a commission of 10%. What price is required to make a profit of $3,000 if 130 passengers are expected on a given service?
Aussie Trainlink is considering investing $300,000 in a marketing campaign. It anticipates the campaign will result in an additional 5 to 10 passengers per service over a 90 day period. Should Aussie Trainlink proceed with the marketing campaign?Why?
CHALLENGE QUESTION.Suppose Aussie Trainlink wishes to introduce a first class travel option. This will involve additional fixed costs of $8,000 per day, and an additional per passenger cost of $95 per first class passenger. Aussie Trainlink believes it can sell a first class fare for $365 and expects 12.5% of passengers will opt for first class.

How many regular passengers and how many first class passengers are required for Aussie Trainlink to make a profit of $12,000 per service
How much revenue will be earned from regular passengers and first class passengers when profit is $12,000 per service