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East Coast Railroad Company transports commodities among three routes (city-pairs): Atlanta/Baltimore, Baltimore/Pittsburgh, and Pittsburgh/Atlanta. Significant costs, their cost behavior, and activity rates for April are
East Coast Railroad Company transports commodities among three routes (city-pairs): Atlanta/Baltimore, Baltimore/Pittsburgh, and Pittsburgh/Atlanta. Significant costs, their cost behavior, and activity rates for April are as follows: Operating statistics from the management information system reveal the following for April: The management of East Coast Railroad Company improved the profitability of the Atlanta/Baltimore route in May by reducing the price of a railcar from $600 to $500. This price reduction increased the demand for rail services. Thus, the number of railcars increased by 275 railcars to a total of 700 railcars. This was accomplished by increasing the size of each train but not the number of trains. Thus, the number of train-miles was unchanged. All the activity rates remained unchanged. a. Prepare a contribution margin report for the Atlanta/Baltimore route for May. Calculate the contribution margin ratio in percentage terms to one decimal place. East Coast Railroad Company Contribution Margin for Atlanta/Baltimore Route For the Month Ended May 31 Revenues Contribution margin Contribution margin ratio b. Prepare a contribution margin analysis to evaluate management's actions in May. Assume that the May planned quantity, price, and unit cost was the same as April. planned contribution margin is given below. If an amount is zero, enter "0
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