The management of East Coast Railroad Company introduced in Exercise improved the profitability of the Atlanta/ Baltimore route in May by reducing the price of a railcar from $ 600 to $ 500. This price reduction increased the demand for rail services. Thus, the number of railcars increased by 275 railcars to a total of 700 railcars. This was accomplished by increasing the size of each train but not the number of trains. Thus, the number of train-miles was unchanged. All the activity rates remained unchanged.
In Exercise 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:

a. Prepare a contribution margin report for the Atlanta/ Baltimore route for May. Calculate the contribution margin ratio in percentage terms to one decimal place.
b. Prepare a contribution margin analysis to evaluate management€™s actions in May. Assume that the May planned quantity, price, and unit cost was the same asApril.

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Cost Labor costs for loading and unloading railrs Fuel costs Train crew labor costs Switchyard labor costs Trackandequipment depreciation Maintenance Amount Cost Behavior Activity Rate 175,582 460 226 267,228 118,327 194,400 129,600 $1.345.363 ariable Variable Variable Variable ixed ixed $46.00 per railcar 12.40 per train-mile 7.20 per train-mile 31.00 per railcar Atlanta Baltimore Pittsburgh Baltimore Pittsbugh Atlanta Total Number of train-miles Number of railcars Revenue per rail car 12,835 425 $600 10,200 2,160 $275 14,020 1,232 $440 37,115 3,817