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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 5614,700 224,000 February 685,400 250,000 March 484,400 162,000 April 657,100 242,000 May 551,100 195,000 June 706,600 263,000 Determine the variable cost per gross-ton mile and the total fixed cost. Variable cost (Round to two decimal places.) Total fixed cost per gross-ton mile a. Young Company budgets sales of $860,000, fixed costs of $25,200, and variable costs of $111,800. What is the contribution margin ratio for Young Company? % b. If the contribution margin ratio for Martinez Company is 36%, sales were $423,000, and fixed costs were $121,820, what was the operating income
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