Variable Costing Income Statement for a Service Company

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

East Coast Railroad Company

Contribution Margin by Route

For the Month Ended April $30$

b$.$ Evaluate the route performance of the railroad using the report in $($a$).$

The route performs significantly worse than do the other two routes. A close examination of the operating statistics indicates that this route runs

railcars, combined with fairly

sensitive to the size, or length, of the train in railcar terms.

total mileage. This combination suggests that the railroad is running many

trains on the railroad. That is$,$ the railroad's profitability is