High-Low Method for a Service Company

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.

High-Low Method for a Service Company 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 $755,200 232,000 February 842,100 259,000 March 595,100 168,000 April 251,000 807,300 677,100 May 202,000 June 868,100 273,000 Determine the variable cost per gross-ton mile and the total fixed cost. a per gross-ton mile Variable cost (Round to two decimal places.) Total fixed cost