(Appendix 5A) Wuensch Inc

question 73

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 fixed component of office expense per month is closest to:

• A) $7,685
• B) $7,182
• C) $6,678
• D) $5,182

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Definitions:

SUTA

State Unemployment Tax Act, the legislation enabling state governments to collect unemployment insurance taxes from employers.

State Rate

A specific tax or fee rate determined by a state government, often applied to sales, income, or property.

Form 941

A tax form used by employers in the United States to report quarterly federal taxes withheld from their employees' earnings.

Social Security

A government program that provides financial assistance to people with insufficient or no income, mainly for the elderly, disabled, and survivors.