Patriot 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 Patriot Railroad is a measure of railroad operating activity, termed “gross- ton miles,” which is the total number of tons multiplied by the miles moved.

Determine the variable cost per gross- ton mile and the total fixedcost.

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January February March April May June Transportation Costs $1,666,000 1,460,200 1,255,000 1,421,000 1,288,000 1,750,000 Gross-Ton Miles 539,000 607,600 475,000 588,000 504,000 750,000