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High-Low Method for Service Company Blowing Rock Railroad decided to use the high-low method and operating data from the past six months to estimate the
High-Low Method for Service Company
Blowing Rock 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 Blowing Rock 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 | $1,083,200 | 298,000 | ||
| February | 1,207,700 | 333,000 | ||
| March | 853,500 | 216,000 | ||
| April | 1,157,900 | 323,000 | ||
| May | 971,100 | 260,000 | ||
| June | 1,245,000 | 351,000 | ||
Determine the variable cost per gross-ton mile and the fixed cost.
| Variable cost (Round to two decimal places.) | $ per gross-ton mile |
| Total fixed cost | $ |
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