Question: Continental 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
Continental 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 Continental 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 | $536,200 | 252,000 | ||
| February | 597,800 | 281,000 | ||
| March | 422,500 | 182,000 | ||
| April | 573,200 | 272,000 | ||
| May | 480,700 | 219,000 | ||
| June | 616,300 | 296,000 | ||
Determine the variable cost per gross-ton mile and the total fixed cost.
| Variable cost (Round to two decimal places.) | |
| Total fixed cost |
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