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Variable Costing Income StatementService 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

Variable Costing Income StatementService 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 2014, are as follows:

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

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Prepare acontribution marginby 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, 2014
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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Calculate: Revenues = revenue per railcar x number of railcars Variable costs: Labor costs for loading = $46 x number of railcars Fuel costs = $12.40 x number of train-miles Train crew labor costs = $7.20 x number of train-miles Switchyard labor = $31 x number of railcars Then prepare contribution margin analysis as: Revenues - Variable costs = Contribution Margin To calculate the contribution margin ratio, divide the contribution margin by revenues.

Learning Objective 4andLearning Objective 6.

Beach Motors Inc.
Variable Costing Income Statement
For the Month Ended July 31, 2014
$
$
$
Fixed costs:
$
$

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