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High-Low Method for a Service Company Continental Railroad decided to use the high-low method and operating data from the past six months to estimate the
High-Low Method for a Service Company
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 | $730,400 | 243,000 | ||
February | 814,300 | 272,000 | ||
March | 575,500 | 176,000 | ||
April | 780,700 | 263,000 | ||
May | 654,800 | 212,000 | ||
June | 839,500 | 286,000 |
Determine the variable cost per gross-ton mile and the total fixed cost.
Variable cost (Round to two decimal places.) | $fill in the blank 1 per gross-ton mile |
Total fixed cost | $fill in the blank 2 |
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