Variable cost per unit = (Highest activity cost - Lowest activity cost)/(Highest activity - Lowest activity)
= (713,600-489,200)/(343,000-211,000)
= 224,400/132,000
= 1.70 per gross ton mile
Fixed cost = Highest activity cost - Highest activity x Variable cost per hour
= 713,600-343,000 x 1.70
= 713,600-583,100
= $130,500
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