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Boston Railroad decided to use the high-low method and operating data from the past six months...

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 $1,336,200 356,000

February 1,489,800 398,000

March 1,052,900 258,000

April 1,428,400 385,000

May 1,198,000 310,000

June 1,535,900 419,000

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

Variable cost (Round to two decimal places.)

per gross-ton mile

Total fixed cost

Business   Accounting   
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Answer #1

The following Workings will help you to get the answer for the above question. The detailed workings are given below.

Variable cost per Gross Tonne Miles will be $3. Workings will follows

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