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Variable Costing Income Statement for a Service Company East Coast Railroad Company transports commodities among three...

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

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ekkarill92 answered 1 year ago
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