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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 $669,600   243,000   February 746,500   272,000   March 527,600   176,000   April 715,700   263,000   May 600,300   212,000   June 769,600   286,000   Determine the variable cost per gross-ton mile and the 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

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 $669,600   243,000   February 746,500   272,000   March 527,600   176,000   April 715,700   263,000   May 600,300   212,000   June 769,600   286,000   Determine the variable cost per gross-ton mile and the 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

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter6: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 8E
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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 $669,600   243,000  
February 746,500   272,000  
March 527,600   176,000  
April 715,700   263,000  
May 600,300   212,000  
June 769,600   286,000  

Determine the variable cost per gross-ton mile and the 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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