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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


 

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. Transportation Costs Gross-Ton Miles January $625,500 294,000 February 697,400 329,000 March 492,900 213,000 April 668,700 318,000 May 560,800 256,000 June 719,000 346,000 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 $ Fixed cost $ per gross-ton mile

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