Kany Freight Services 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 Kany Freight is gross-ton miles, which represents the total number of tons multiplied by the miles moved. Month Transportation Costs Gross-Ton Miles January $785,000 February $860,500 March $670,000 April $910,200 May $750,000 June $975,000 290,000 320,000 240,000 350,000 275,000 385,000 Determine the variable cost per gross-ton mile.

Kany Freight Services 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 Kany Freight is gross-ton miles, which represents the total number of tons multiplied by the miles moved. Month Transportation Costs Gross-Ton Miles January $785,000 February $860,500 March $670,000 April $910,200 May $750,000 June $975,000 290,000 320,000 240,000 350,000 275,000 385,000 Determine the variable cost per gross-ton mile.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 22E: Ellerson Company provided the following information for the last calendar year: During the year,...

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