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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 | $627,400 | 279,000 | ||
February | 699,600 | 312,000 | ||
March | 494,400 | 202,000 | ||
April | 670,700 | 302,000 | ||
May | 562,500 | 243,000 | ||
June | 721,200 | 328,000 |
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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