igh-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 $999,000 347,000 February 1,113,900 388,000 March 787,200 251,000 April 1,067,900 375,000 May 895,700 302,000 June 1,148,300 408,000 Determine the variable cost per gross-ton mile and the total fixed cost. Variable cost (Round to two decimal places.) $fill in the blank 1 per gross-ton mile Total fixed cost $fill in the blank 2
igh-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 $999,000 347,000 February 1,113,900 388,000 March 787,200 251,000 April 1,067,900 375,000 May 895,700 302,000 June 1,148,300 408,000 Determine the variable cost per gross-ton mile and the total fixed cost. Variable cost (Round to two decimal places.) $fill in the blank 1 per gross-ton mile Total fixed cost $fill in the blank 2
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 | $999,000 | 347,000 | ||
| February | 1,113,900 | 388,000 | ||
| March | 787,200 | 251,000 | ||
| April | 1,067,900 | 375,000 | ||
| May | 895,700 | 302,000 | ||
| June | 1,148,300 | 408,000 |
Determine the variable cost per gross-ton mile and the total fixed cost.
| Variable cost (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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