Wuensch Inc

question 74

Multiple Choice

Wuensch Inc., an escrow agent, has provided the following data concerning its office expenses: Management believes that office expense is a mixed cost that depends on the number of escrows completed. Note: Real estate purchases usually involve the services of an escrow agent that holds funds and prepares documents to complete the transaction.
Using the high-low method, the estimate of the variable component of office expense per escrow completed is closest to:

• A) $45.44
• B) $42.76
• C) $88.22
• D) $131.00

---

Definitions:

Specialized Cognitive Mechanisms

Brain functions or structures evolved to solve specific problems of survival or reproduction.

Evolutionary Perspective

An approach in psychology that explains mental and psychological traits—such as memory, perception, or language—as adaptations, i.e., as the functional products of natural selection.

Inferential Heuristics

Mental shortcuts that allow individuals to make judgments and solve problems quickly but can sometimes lead to errors in reasoning.

Conjunction Fallacy

A logical error where individuals mistakenly believe that specific conditions are more probable than a single general one.