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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 $175,582 Variable $46.00 per railcar
Fuel costs 460,226 Variable 12.40 per train-mile
Train crew labor costs 267,228 Variable 7.20 per train-mile
Switchyard labor costs 118,327 Variable 31.00 per railcar
Track and equipment depreciation 194,400 Fixed
Maintenance 129,600 Fixed
$1,345,363

Operating statistics from the management information system reveal the following for April:

Atlanta/ Baltimore Baltimore/ Pittsburgh Pittsburgh/ Atlanta Total
Number of train-miles 12,835 10,200 14,080 37,115
Number of railcars 425 2,160 1,232 3,817
Revenue per railcar $600 $275 $440

a. Prepare a contribution margin by route report for East Coast Railroad Company for the month of April. Compute the contribution margin ratio. Rounded to one decimal place. If required, use the minus sign to indicate a negative contribution margin.

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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