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 $175,582 Variable $46.00 per railcar Fuel costs 460,226 Variable 12.40 per train-mile Train crew labor costs 267,228 Variable 7.20 per train-mile Switchyard labor costs 118,327 Variable 31.00 per railcar Track and equipment depreciation 194,400 Fixed Maintenance 129,600 Fixed $1,345,363 Operating statistics from the management information system reveal the following for April: Atlanta/Baltimore Baltimore/Pittsburgh Pittsburgh/Atlanta Total Number of train-miles 12,835 10,200 14,080 37,115 Number of railcars 425 2,160 1,232 3,817 Revenue per railcar $600 $275 $440 a. Prepare a contribution margin by route report for East Coast Railroad Company for the month of April. Compute the contribution margin ratio. Rounded to one decimal place. If required, use the minus sign to indicate a negative contribution margin. 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 % % % %

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter7: Variable Costing For Management analysis

Section: Chapter Questions

Problem 17E: Variable costing income statement for a service company East Coast Railroad Company transports...

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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	$175,582		Variable	$46.00	per railcar
Fuel costs	460,226		Variable	12.40	per train-mile
Train crew labor costs	267,228		Variable	7.20	per train-mile
Switchyard labor costs	118,327		Variable	31.00	per railcar
Track and equipment depreciation	194,400		Fixed
Maintenance	129,600		Fixed
	$1,345,363

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

	Atlanta/ Baltimore	Baltimore/ Pittsburgh	Pittsburgh/ Atlanta	Total
Number of train-miles	12,835		10,200		14,080	37,115
Number of railcars	425		2,160		1,232	3,817
Revenue per railcar	$600		$275		$440

a. Prepare a contribution margin by route report for East Coast Railroad Company for the month of April. Compute the contribution margin ratio. Rounded to one decimal place. If required, use the minus sign to indicate a negative contribution margin.

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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