Question: Boston 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

Boston 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 Boston Railroad is a measure of railroad operating activity, termed gross-ton miles, which is the total number of tons multiplied by the miles moved.

Transportation Costs Gross-Ton Miles
January $1,776,000 560,000
February 2,700,000 1,000,000
March 1,650,000 500,000
April 1,860,000 600,000
May 1,440,000 400,000
June 1,566,000 460,000

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

Variable cost (If required, round to two decimal places.) $ ______per gross-ton mile
Total fixed cost $_______

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