Question: Blowing Rock Railroad decided to use the high-low method and operating data from the past six months to estimate the fixed and variable components of

Blowing Rock Railroad decided to use the high-low method and operating data from the past six months to estimate the fixed and variable components of transportation costs. The activity base used by Blowing Rock Railroad is a measure of railroad operating activity, termed "gross-ton miles,"? which is the total number of tons multiplied by the miles moved.

Determine the variable cost per gross-ton mile and the fixed cost.

Transportation Costs Gross-Ton Miles $760,000 850,000 600,000 810,000 275,000 310,000 200,000 January February March April May June 300,000 240,000 680,000 875,000 325,000

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