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The president of New York Railroad wants to obtain an overview of the company's operations, particularly with respect to comparing freight and passenger business. He
The president of New York Railroad wants to obtain an overview of the company's operations, particularly with respect to comparing freight and passenger business. He has heard about "contribution" approaches to cost allocations that emphasize cost behavior patterns and contribution margins, contributions controllable by segment managers, and contributions by segments. The president has hired as a consultant to help him. He has given you the following information. Click the icon to view the information.) Read the requirements. Requirement 1. The president asks you to prepare income statements, dividing the data for the company as a whole between the freight and passenger traffic and then subdividing the passenger traffic into three divisions. (Enter amounts in dollars. Leave any unused cells blank. Do not enter a "O" for any zero-balances. Use a minus sign or parentheses for any negative contributions.) Begin by preparing the income statement for the railroad as a whole, then show the income statements for the freight and passenger divisions, and finally, show the income statements for the subdivisions of the Passenger division. Railroad as a whole Revenue Variable costs Contribution margin Separable discretionary fixed costs Contribution controllable by segment managers Separable committed costs Contribution by segments Unallocated costs Income before taxes
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