Question
River Runs Railroad decided to use the high-low method and operating data from the past six months to estimate the fixed and variable components of
River Runs 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 River Runs Railroad is a measure of railroad operating activity, termed "gross-ton miles," which is the total number of tons multiplied by the miles moved.
Month | Transportation Costs | Gross-Ton Miles |
---|---|---|
January | $987,700 | 225,000 |
February | 1,101,200 | 252,000 |
March | 778,300 | 163,000 |
April | 1,055,800 | 244,000 |
May | 885,500 | 196,000 |
June | 1,135,300 | 265,000 |
Determine the variable cost per gross-ton mile and the fixed cost. Round variable cost per gross-ton mile to two decimal places. Variable cost fill in the blank 1 of 2$ per gross-ton mile Fixed cost fill in the blank 2 of 2$
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