Missoula 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 Missoula 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 January February March April May June Transportation Costs $1,575,000 2,095,800 1,675,000 1,800,000 1426,600 2,050,000 Gross Ton Miles 125,000 180,000 136,000 150,000 110,000 175,000

Question: Missoula 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

Missoula 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 Missoula Railroad is a measure of railroad operating activity, termed â€œgross-ton miles,â€ which is the total number of tons multiplied by the miles moved.

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

January February March April May June Transportation Costs $1,575,000 2,095,800 1,675,000 1,800,000 1426,600 2,050,000 Gross-Ton Miles 125,000 180,000 136,000 150,000 110,000 175,000

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