Question

Payment for subscriptions is billed one month in advance. First month's payments are pro-rated for the amount due up until the 15th of the month plus the next month's bill amount. All monthly payments are due by the 15th of each month. Payments received after the 20th of the month will result in a late fee of $20.00. The late fee may be waived one time per year. A customer calls and has questions about the bill for their first month's subscription. They want to know why the monthly rate is $45.00, but the bill is for $60.00. What is the most likely reason for the bill being this amount?
A. The customer owes a late fee in addition to the subscription amount.

B. There was a mistake and the customer was over-charged.

C. The subscription began about 10 days before the 15th of the month.

D. The customer's account was upgraded to the next subscription level.

Answer 1

C. The subscription began about 10 days before the 15th of the month. so you pay the next mounth of the 15

Answer 2

Based on the question, the answer is C. The subscription began about 10 days before the 15th of the month.

The reason the monthly rate is $45 but the customer was charged for $60 is because they started the subscription prior the the cycle date of the bill period. Due to the change in the cycle date, the customer is getting a prorated charge for the days that had service prior to the date of the bill and current cycle starting.