Estimate the Answer by Picking the Best Choice Without Calculating

question 189

Multiple Choice

Estimate the answer by picking the best choice without calculating. If your credit card balance is $962, you make a $50 payment, the APR is 6%, and the interest is calculated according to the adjusted balance method, then the finance charge is __________.

• A) $4.81
• B) $57.72
• C) $4.59
• D) $54.72
• E) $4.56

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Definitions:

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity, allowing for more accurate forecasting and analysis.

Static Budget

A fixed budget that remains unchanged over a period, regardless of variations in actual sales volume, production levels, or other operating factors.

Variable Budget

Variable Budget is a budget that adjusts based on changes in the volume of activity, allowing expenses to vary in direct proportion to changes in operational levels.

Favorable Variances

Differences between actual and budgeted or standard costs that result in better-than-expected financial performance.