Norwalk Express is a luxury passenger carrier in Connecticut. All seats are located in first class, and the following data are available:

Number of seats per passenger train car70

Average load factor (percentage of seats filled)80%

Average full passenger fee$ 170

Average variable cost per passenger$90

Fixed operating cost per month$ 2,700,000

Norwalk Express has an opportunity to obtain a new route that would be traveled 15 times per month. The company believes it can sell seats at $180 on the route, but the load factor would be 60 percent. Fixed costs would increase by $250,000 per month for additional crew, additional passenger train cars, maintenance, and so on. Variable cost per passenger would remain at $90.

1.Should the company obtain the route?

2.How many passenger train cars must Norwalk Express operate to earn pre-tax income of $120,000 per month on this route? (Round to the nearest whole number.)

3.If the load factor could be increased to 70 percent, how many passenger train cars must be operated to earn pre-tax income of $120,000 per month on this route? (Round to the nearest whole number.)

4.What qualitative factors should be considered by Norwalk Express in making its decision about acquiring this route?

B. What is the break-even point in passenger cars per month? (Round to the nearest whole number).