In: Accounting
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 | $151,360 | Variable | $43.00 | per railcar | ||
Fuel costs | 409,360 | Variable | 11.90 | per train-mile | ||
Train crew labor costs | 199,520 | Variable | 5.80 | per train-mile | ||
Switchyard labor costs | 114,400 | Variable | 32.50 | per railcar | ||
Track and equipment depreciation | 183,700 | Fixed | ||||
Maintenance | 122,400 | 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 | 380 | 2,010 | 1,130 | 3,520 | ||||
Revenue per railcar | $704 | $268 | $452 |
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 |