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 | $1,178,600 | 314,000 | ||
| February | 1,314,100 | 351,000 | ||
| March | 928,700 | 227,000 | ||
| April | 1,259,900 | 339,000 | ||
| May | 1,056,700 | 273,000 | ||
| June | 1,354,700 | 369,000 | ||
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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