Question
Variable Costing Income Statement for a Service Company East Coast Railroad Company transports commodities among three routes (city-pairs): Atlanta/Baltimore, Baltimore/Pittsburgh, and Pittsburgh/Atlanta. Significant costs, their
Variable Costing Income Statement for a Service Company
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:
Cost | Amount | Cost Behavior | Activity Rate | |||
Labor costs for loading and unloading railcars | $190,560 | Variable | $48.00 | per railcar | ||
Fuel costs | 516,000 | Variable | 15.00 | per train-mile | ||
Train crew labor costs | 220,160 | Variable | 6.40 | per train-mile | ||
Switchyard labor costs | 107,190 | Variable | 27.00 | per railcar | ||
Track and equipment depreciation | 217,100 | Fixed | ||||
Maintenance | 144,700 | Fixed |
Operating statistics from the management information system reveal the following for April:
Atlanta/ Baltimore | Baltimore/ Pittsburgh | Pittsburgh/ Atlanta | Total | |||||
Number of train-miles | 12,080 | 9,520 | 12,800 | 34,400 | ||||
Number of railcars | 490 | 2,120 | 1,360 | 3,970 | ||||
Revenue per railcar | $740 | $228 | $465 |
a. Prepare a contribution margin by route report for East Coast Railroad Company for the month of April. Calculate the contribution margin ratio, rounded to one decimal place.
East Coast Railroad Company | ||||
Contribution Margin by Route | ||||
For the Month Ended April 30 | ||||
Atlanta/Baltimore | Baltimore/Pittsburgh | Pittsburgh/Atlanta | Total | |
Revenues | $ | $ | $ | $ |
Variable costs: | ||||
Labor costs for loading and unloading railcars | $ | $ | $ | $ |
Fuel costs | ||||
Train crew labor costs | ||||
Switchyard labor costs | ||||
Total variable costs | $ | $ | $ | $ |
Contribution margin | $ | $ | $ | $ |
Contribution margin ratio | % | % | % | % |
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