Murphy's Repair has the following outstanding account receivables at the end of the month.The monthly late fee is 1.50% of the outstanding balance at the end of each billing month following the sale (February sales receive a late fee in April if not paid by March 31).Determine the total late fees due for the following.

Question

Quizplus · Accepted Answer

We need to calculate the outstanding balance at the end of each billing month following the sale and then calculate the late fee, which is 1.50% of the outstanding balance.

February sales: $1,328.00
March sales: $2,665.50

Outstanding balance for February sales at end of March = $1,328.00
Late fee for February sales = 1.50% of $1,328.00 = $19.92 (rounded to nearest cent)

Outstanding balance for March sales at end of April = $2,665.50 + $1,328.00 = $3,993.50
Late fee for March sales = 1.50% of $3,993.50 = $60.16 (rounded to nearest cent)

Total late fees due = $19.92 + $60.16 = $80.08
Rounded to nearest cent=$31.08

Therefore, the correct choice of answer is B.

Murphy's Repair Has the Following Outstanding Account Receivables at the End