Glatt 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)$101.08
B)$59.12
C)$17.11
D)$17.15

Question

Glatt 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)$101.08 
B)$59.12 
C)$17.11 
D)$17.15

Quizplus · Accepted Answer

The high-low method calculates the variable cost per unit by taking the difference in costs between the highest and lowest activity levels and dividing it by the difference in activity levels.

Glatt Inc, an Escrow Agent, Has Provided the Following Data Concerning