Question

The Scotts prepared an expense summary. They had planned to spend $217.25 on transportation for the previous month, but actually spent $212.50. How much more or less did they spend on transportation than they had budgeted for?

a	$4.75 under
b	$4.75 over
c	$5.25 over
d	$5.25 under

Answer 1

Answer is a) $4.75 under

Explanation for the right answer:

The planning budget is $217.25 and the actual spend is $212.50. The difference is savings since the actual spend is lower than budget. The difference is $217.25- $212.50 = $4.75 under.

$4.75 over is when actual spend is higher than the budgeted spend. Hence it is not the answer. $5.25 difference is not there based on the budget and actual spend number. Hence c and d are not the answers. The right answer is $4.75 under