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EX 5-8 High-low method for a service company Obj. Boston Railroad decided to use the high-low method and operating data from the past six months
EX 5-8 High-low method for a service company Obj. 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
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