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

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!