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High-Low Method for a Service Company Boston Railroad decided to use the high-low method and...

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Accounting

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 $1,491,200 340,000
February 1,662,600 380,000
March 1,175,000 246,000
April 1,594,000 368,000
May 1,336,900 296,000
June 1,714,000 400,000

Determine the variable cost per gross-ton mile and the total fixed cost.

Variable cost (Round to two decimal places.)
Total fixed cost

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