(Appendix 5A) Wuensch Inc

question 48

Multiple Choice

(Appendix 5A) 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

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Definitions:

Buffet Revenue

Income generated from selling all-you-can-eat meal services, typically seen in restaurants that offer buffet-style dining.

All-You-Can-Eat

A service model usually found in restaurants where customers pay a fixed price and can consume as much food as they desire.

Equity Market

A marketplace where shares of publicly held companies are issued and traded, either through exchanges or over-the-counter markets.

Bond Market

A financial market where participants can issue new debt, known as the primary market, or buy and sell debt securities, known as the secondary market.