high low method for service company 404375
Blowing Rock 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 Blowing Rock 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 | $1,384,400 | 307,000 | ||
| February | 1,543,600 | 343,000 | ||
| March | 1,090,900 | 222,000 | ||
| April | 1,479,900 | 332,000 | ||
| May | 1,241,200 | 267,000 | ||
| June | 1,591,300 | 361,000 | ||
Determine thevariable cost per gross ton mile and thefixed cost.
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| Variable cost: (Round to two decimal places.) | $ per gross ton mile |
| Total fixed cost: | $ |
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