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

Great Plains 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 Great Plains 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 fixedcost.

Transportation Costs Gross-Ton Miles anuary February March April $1,050,000 1,150,000 1,350,000 1,000,000 1,225,000 1,600,000 285,000 325,000 400,000 250,000 375,000 450,000 May June

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