Solution-Determine the variable cost per gross-ton mile

Determine the variable cost per gross-ton mile

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Reference no: EM132881652

Problem - High-low method for service company - Diamond 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 Diamond 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	$1,190,000	385,000
February	1,043,000	434,000
March	900,000	350,000
April	1,015,000	420,000
May	920,000	360,000
June	1,250,000	525,000

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

Reference no: EM132881652

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Determine the variable cost per gross-ton mile

Reference no: EM132881652

Reference no: EM132881652

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