High-Low Method for a Service Company Boston Railroad decided to use the high-low method and...
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Accounting
High-Low Method for a 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 | $1,491,200 | 340,000 | ||
| February | 1,662,600 | 380,000 | ||
| March | 1,175,000 | 246,000 | ||
| April | 1,594,000 | 368,000 | ||
| May | 1,336,900 | 296,000 | ||
| June | 1,714,000 | 400,000 | ||
Determine the variable cost per gross-ton mile and the total fixed cost.
| Variable cost (Round to two decimal places.) | |
| Total fixed cost |
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