Here's the original question with the 5 answer choices.
A project scheduled to be carried out over a single fiscal year has a budget of $12,600, divided into12 equal monthly allocations. At the end of the fourth month of that fiscal year, the total amount actually spent on the project was $4,580. By how much was the project over its budget?
(A) $380
(B) $540
(C) $1,050
(D) $1,380
(E) $1,430
Given that the first 3 answer choices are quite spread apart, we might get by with some estimation/number sense.
The 12-month budget is $12,600.
So, the PROJECTED budget PER MONTH = $12,600/12 =
$1050
After 4 months, the ACTUAL amount spent =
$4580 (total)
So, the ACTUAL spend PER MONTH =
$4580/4
Here's where some number sense comes in.
If the actual spend per month were $1100, then the total 4-month spend would be $4400 (too low)
If the actual spend per month were $1200, then the total 4-month spend would be $4800 (too high)
Since
$4580 is closer to $4400 than to $4800, we can conclude that the spend per month is closer to $1100 than to $1200.
This means that the actual monthly spend is
LESS THAN $1150
So, the PROJECTED budget PER MONTH =
$1050, and the actual monthly spend is
LESS THAN $1150.
The DIFFERENCE is less than $100/month. In other words, the project is over budget by less than $100 each month.
So, over a 4-month period, the project is over budget by less than $400
Only answer choice
A works.
Aside: We have a free video on using number sense and estimation at https://www.gmatprepnow.com/module/gener ... es?id=1111
Cheers,
Brent
