Question

A certain company has budgeted $1,440 for entertainment expenses for the year, divided into 12 equal monthly allocations. If by the end of the third month, the total amount spent on entertainment was $300, how much was the company under budget or over budget?

Answer 1

$240 under budget

Step-by-step explanation:

$ 300 for 3 months

For 1 month = 300/3= $ 100

$ 1200 for 12 months and budgeted $1,440 for entertainment expenses

$1440-$1200=$ 240 under budget

Answer 2

$60 under budget

Step-by-step explanation:

The initial budget divided into equal monthly allocation is $120 (1440/12), for three months should be $360 (120*3).

However, since the actual entertainment expenses was under or less than the initial budget; actual expense $300 for three months is $60 lesser than the forecasted amount (360-300) the company saved costs.