Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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 | $1,776,000 | 560,000 | ||
February | 2,700,000 | 1,000,000 | ||
March | 1,650,000 | 500,000 | ||
April | 1,860,000 | 600,000 | ||
May | 1,440,000 | 400,000 | ||
June | 1,566,000 | 460,000 |
Determine the variable cost per gross-ton mile and the total fixed cost.
Variable cost (If required, round to two decimal places.) | $ ______per gross-ton mile |
Total fixed cost | $_______ |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started