Continental 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 Continental 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 $831,600 369000 February 927,200 412000 March 655,300 267000 April 889,000 399,000 May 745,600 321,000 June 955,900 434,000 Determine the variable cost per gross-ton mile and the total fixed cost. Variable cost (Round to two decimal places.) $____ per gross-ton mile Total fixed cost $____
Continental 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 Continental 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 $831,600 369000 February 927,200 412000 March 655,300 267000 April 889,000 399,000 May 745,600 321,000 June 955,900 434,000 Determine the variable cost per gross-ton mile and the total fixed cost. Variable cost (Round to two decimal places.) $____ per gross-ton mile Total fixed cost $____
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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High-Low Method for a Service Company
Continental 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 Continental 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 | $831,600 | 369000 | ||
| February | 927,200 | 412000 | ||
| March | 655,300 | 267000 | ||
| April | 889,000 | 399,000 | ||
| May | 745,600 | 321,000 | ||
| June | 955,900 | 434,000 |
Determine the variable cost per gross-ton mile and the total fixed cost.
| Variable cost (Round to two decimal places.) | $____ per gross-ton mile |
| Total fixed cost | $____ |
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