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https /gate aon.com Candidate/ Step/SaveAssessmentAnswe yjew Favorites Iools Help ABC Corporation Forecasted Expenditure Budget for Q3 1,900 $2.340 $6,430 $580 $ 580 s 2.780 $ 14.610 $ 21.610 Advertsing/Marketing Rent and Rates Wages/Salaries Maintenance Ublities Total Expenditures Total Sales Revenue 2% 4% 6% O 896 f utilities costs were 10% below forecast, by approximately much would this reduce total es over Q3? Clear Answer 10% HP L1908

Solution

Existing total expenditures in Q3 = $14,610

Existing utilities cost in Q3 = $2,780

New utilities cost = $2,780-($2,780*10%) = $2,780-$278 = $2,502

New total expenditures after decrease in utilities cost = $14,610-$2,780+$2,502 = $14,332

Decrease in total expenditures over Q3 = $14,610-$14,332 = $278

% decrease in total expenditures over Q3 = ($278/$14,610)*100 = 1.90% (i.e. 2% approx.)

Therefore the correct option is 2%. Hence decrease in utilities cost will reduce total expenditures over Q3 by 2%.