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Business, 07.05.2020 04:08 dondre54

Continental 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 Continental 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 $24,500,000 3,000,000

February 22,375,000 2,500,000

March 29,000,000 6,300,000

April 34,800,000 9,500,000

May 40,312,500 12,750,000

June 35,500,000 10,000,000

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

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