Question - 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 mile" which is the total number of tons multiplied by the miles moved.
Transportation cost gross ton miles
jan 760,000 275,000
feb 850,000 310,000
march 600,000 200,000
april 810,000 300,000
may 680,000 240,000
june 875,000 325,000
Determine the variable cost per gross-ton mile and the fixed cost.