High-Low Method for 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. January March April February 2,700,000 May Transportation June Costs $1,776,000 1,650,000 1,860,000 1,440,000 1,566,000 Gross -Ton Miles 560,000 Total fixed cost 1,000,000 500,000 600,000 400,000 460,000 Determine the variable cost per gross-ton mile and the total fixed cost. Variable cost (If required, round to two decimal places.) $ per gross-ton mile $
High-Low Method for 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. January March April February 2,700,000 May Transportation June Costs $1,776,000 1,650,000 1,860,000 1,440,000 1,566,000 Gross -Ton Miles 560,000 Total fixed cost 1,000,000 500,000 600,000 400,000 460,000 Determine the variable cost per gross-ton mile and the total fixed cost. Variable cost (If required, round to two decimal places.) $ per gross-ton mile $
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:High-Low Method for 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.
January
March
April
February 2,700,000
May
Transportation
June
Costs
$1,776,000
1,650,000
1,860,000
1,440,000
1,566,000
Gross
-Ton
Miles
560,000
Total fixed cost
1,000,000
500,000
600,000
400,000
460,000
Determine the variable cost per gross-ton mile and the total fixed cost.
Variable cost (If required, round to two decimal places.)
$ per gross-ton mile
$
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