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 | $_______ |
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
