Question

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? [Official GMAT-2018]

Hint:

To determine if a difference is greater than a percentage, calculate the percentage of the budgeted amount and compare it to the difference.

Answer 1

Step 1: Calculate the difference between the amount spent and the amount budgeted for each account. 
We are given the following table: \[ \begin{array}{|c|c|c|} \hline \textbf{Accounts} & \textbf{Amount Budgeted} & \textbf{Amount Spent} \\ \hline \text{Payroll} & 110,000 & 117,000 \\ \text{Taxes} & 40,000 & 42,000 \\ \text{Insurance} & 2,500 & 2,340 \\ \hline \end{array} \] Now, calculate the difference for each account: - For Payroll: \[ \text{Difference for Payroll} = 117,000 - 110,000 = 7,000 \] - For Taxes: \[ \text{Difference for Taxes} = 42,000 - 40,000 = 2,000 \] - For Insurance: \[ \text{Difference for Insurance} = 2,500 - 2,340 = 160 \] Step 2: Calculate 6 percent of the budgeted amount for each account. 
- For Payroll: \[ 6\% \text{ of Payroll} = 0.06 \times 110,000 = 6,600 \] - For Taxes: \[ 6\% \text{ of Taxes} = 0.06 \times 40,000 = 2,400 \] - For Insurance: \[ 6\% \text{ of Insurance} = 0.06 \times 2,500 = 150 \] Step 3: Compare the differences with 6 percent of the budgeted amounts. 
- The difference for Payroll (7,000) is greater than 6 percent of Payroll (6,600). - The difference for Taxes (2,000) is less than 6 percent of Taxes (2,400). - The difference for Insurance (160) is greater than 6 percent of Insurance (150). 
Step 4: Conclusion. 
The accounts where the amount spent differs from the amount budgeted by more than 6 percent are Payroll and Insurance.