High-Low Method for 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	$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.

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