Miss River 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 Miss River 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 $6,500,000 2,500,000 February 6,187,500 2,250,000 March 6,980,000 2,940,000 April 7,500,000 3,400,000 May 8,775,000 4,500,000 June 8,200,000 4,000,000 Determine the variable cost per gross-ton mile and the fixed cost. Round variable cost per unit to the nearest cent. Variable cost per gross-ton mile Fixed cost

Question
Miss River 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 Miss River
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
$6,500,000
2,500,000
February
6,187,500
2,250,000
March
6,980,000
2,940,000
April
7,500,000
3,400,000
May
8,775,000
4,500,000
June
8,200,000
4,000,000
Determine the variable cost per gross-ton mile and the fixed cost. Round variable cost per unit to the nearest cent.
Variable cost
per gross-ton mile
Fixed cost
Expand
Transcribed Image Text

Miss River 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 Miss River 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 $6,500,000 2,500,000 February 6,187,500 2,250,000 March 6,980,000 2,940,000 April 7,500,000 3,400,000 May 8,775,000 4,500,000 June 8,200,000 4,000,000 Determine the variable cost per gross-ton mile and the fixed cost. Round variable cost per unit to the nearest cent. Variable cost per gross-ton mile Fixed cost

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