High-low method for service company
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 miles," which is the total number of tons multiplied by the miles moved.
Determine the variable cost per gross-ton mile and the fixed cost.
A. What is the Variable cost (to the nearest cent): per gross-ton mile?
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