Thoroughbred 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 Thoroughbred Railroad is a measure of railroad operating activity, termed €œgross-ton miles,€ which is the total number of tons multiplied by the miles moved.

Determine the variable cost per gross-ton mile and the fixedcost.

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Transportation Costs Gross-Ton Miles 1,463,000 1,372,000 1,322,000 1,641,000 1,522,000 1,748,000 January February March 595,000 540,000 485,000 740,000 670,000 840,000 April May June