Problem Solving

Hi AbeNeedsAnswers,

We're given a table of information that compares the amount spent to the amount budgeted for 3 different categories. We're asked for the categories in which the amount SPENT differed from the amount budgeted by MORE than 6 percent of the amount budgeted.

It's important to note that the question asks for a DIFFERENCE of more than 6% (which does not necessarily mean "higher" or "lower" - just a difference). This question ultimately comes down to performing a few calculations, but you might find a particular math tactic can save you a bit of time.

Let's start with 'Insurance'; budgeted = $2500, spent = $2340... To calculate 6% of $2500, you might find it easy to calculate 1% first (since that involves simply 'moving' the decimal point 2 spaces to the left... 1% of $2500 = $25. Therefore 6% would equal 6 times that.... (6)($25) = $150.

$2340 is $160 less than $2500 - and since $160 is greater than $150, that difference is clearly greater than 6%.

'Taxes' seems like the next easiest number to deal with: budgeted = $40,000, spent = $42,000...
1% of $40,000 = $400, so 6% = (6)($400) = $2400. The difference between budgeted and spent is only $2,000... so that is LESS than a 6% difference. At this point, the correct answer must be either C or D.

'Payroll'; budgeted = $110,000, spent = $117,000. 1% of $110,000 = $1,100, so 6% = $6,600. The difference between the budgeted and spent is $7,000, so the difference here is also greater than 6%.

Final Answer: D

GMAT assassins aren't born, they're made,
Rich

AbeNeedsAnswers wrote:

The table shows the amount budgeted and the amount spent for each of three accounts in a certain company.For which of these accounts did the amount spent differ from the amount budgeted by more than 6 percent of the amount budgeted ?

A. Payroll only
B. Taxes only
C. Insurance only
D. Payroll and Insurance
E. Taxes and Insurance

Let's take 6% of each value budgeted:

Payroll:

110,000 x 0.06 = 6600

Since 117000 - 110,000 = 7,000, the amount spent differed by more than 6% of the amount budgeted.

Taxes:

40,000 x 0.06 = 2,400

Since 42,000 - 40,000 = 2,000, the amount spent DID NOT differ by more than 6% of the amount budgeted.

Insurance:

2,500 x 0.06 = 150

Since 2,500 - 2,340 = 160, the amount spent differed by more than 6% of the amount budgeted.

Answer: D