1. 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	$24,500,000		3,000,000
   February	22,375,000		2,500,000
   March	29,000,000		6,300,000
   April	34,800,000		9,500,000
   May	40,312,500		12,750,000
   June	35,500,000		10,000,000

   Determine the variable cost per gross-ton mile and the total fixed cost.

   Variable cost (If required, round to two decimal places.)	$ per gross-ton mile
   Total fixed cost	$