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 | $1,055,700 | 351,000 | ||
| February | 1,177,100 | 392,000 | ||
| March | 831,900 | 254,000 | ||
| April | 1,128,600 | 380,000 | ||
| May | 946,500 | 306,000 | ||
| June | 1,213,500 | 413,000 | ||
Determine the variable cost per gross-ton mile and the fixed cost.
| Variable cost (Round to two decimal places.) | $fill in the blank 1 per gross-ton mile |
| Total fixed cost | $fill in the blank 2 |
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