John Has Overdraft Protection Which Has a Fee of Five

question 81

Multiple Choice

John has overdraft protection which has a fee of five dollars per use and a 21 percent annual interest charge.NSF fees at his bank are $35.This month John's unexpected car expense caused his account to become overdrawn by $1200 for 14 days until his pay cheque was deposited.What was the total expense for John in this circumstance?

• A)$35.00
• B)$70.00
• C)$14.67
• D)$9.67

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Definitions:

Per Unit Basis

A method of quantifying costs, revenues, or other financial metrics on the basis of a single unit of production or service.

Activity

A specific task or action that is part of a process or contributes to the completion of a project.

Variable Costs

Expenditures that fluctuate directly in relation to the amount of goods or services produced.

Relevant Range

The relevant range is a level of activity within which assumptions about variable and fixed cost behaviors are valid, used for budgeting and forecasting.