High-low method for a service companySierra Railroad Inc. 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 Sierra Railroad is "gross-ton miles," which isthe total number of tons multiplied by the miles moved.Transportation Costs$2,900,0002,875,0003,065,0003,225,000Gross-Ton Miles3,000,0002,500,0006,300,0009,500,00012,750,00010,000,000Determine the variable cost per gross-ton mile and the total fixed cost.Variable cost (If required, round to two decimal places.) $Total fixed cost $JanuaryFebruaryMarchAprilMayJune3,387,5003,250,000per gross-ton mile

High Low Method: It implies a technique that is being used by the business in segregating fixed and…

High-low method for a service company Sierra Railroad Inc. 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 Sierra Railroad is "gross-ton miles," which is the total number of tons multiplied by the miles moved. Gross-Ton Miles 3,000,000 2,500,000 6,300,000 9,500,000 12,750,000 10,000,000 Determine the variable cost per gross-ton mile and the total fixed cost. Variable cost (If required, round to two decimal places.) $ Total fixed cost $ January February March April May June Transportation Costs $2,900,000 2,875,000 3,065,000 3,225,000 3,387,500 3,250,000 per gross-ton mile

High-low method for a service company Sierra Railroad Inc. 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 Sierra Railroad is "gross-ton miles," which is the total number of tons multiplied by the miles moved. Gross-Ton Miles 3,000,000 2,500,000 6,300,000 9,500,000 12,750,000 10,000,000 Determine the variable cost per gross-ton mile and the total fixed cost. Variable cost (If required, round to two decimal places.) $ Total fixed cost $ January February March April May June Transportation Costs $2,900,000 2,875,000 3,065,000 3,225,000 3,387,500 3,250,000 per gross-ton mile

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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 $1,776,000 560,000 February 2,700,000 1,000,000 March 1,650,000 500,000 April 1,860,000 600,000 May 1,440,000 400,000 June 1,566,000 460,000 Determine the variable cost per gross-ton mile and the total fixed cost. Variable cost (If required, round to two decimal places.) $fill in the blank 1 per gross-ton mile Total fixed cost $fill in the blank 2
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