Question
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:
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.
|
Hide Feedback Incorrect Check My Work Feedback
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.
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started