What is the actual net income for the month? What, if any, changes could have been made to the actual amounts this month to keep the actual net income at a positive value?
a. The actual net income for the month is $-\$85$. Less money could have been spent on food, recreation and clothes.
b. The actual net income for the month is $\$85$. No changes necessary.
c. The actual net income for the month is $-\$85$. No changes necessary.
Answer (1)
Calculate the actual income: $850.
Calculate the total actual expenses: $300 + $220 + $75 + $200 + $80 + $60 = $935.
Calculate the actual net income: $850 - $935 = -$85.
The actual net income is − $85 , and to keep it positive, less money could have been spent on food, recreation, and clothes. The answer is − $85 .
Explanation
Calculate Actual Net Income First, we need to calculate the actual net income for the month based on the provided table. The net income is calculated by subtracting the total expenses from the total income. Let's start by identifying the actual income and expenses from the table.
Sum Up Expenses The actual income (wages) is $850. The actual expenses are:
Expenses: $300 Car: $220 Food & Personal Items: $75 Cell Phone: $200 College Savings: $80 Clothes: $60
Now, let's sum up the expenses: 300 + 220 + 75 + 200 + 80 + 60 = 935 So, the total actual expenses are $935.
Calculate Net Income Now, we subtract the total actual expenses from the total actual income to find the actual net income: 850 − 935 = − 85 Therefore, the actual net income for the month is -$85.
Analyze Changes to Keep Net Income Positive Since the actual net income is -$85, it is a negative value. To keep the actual net income at a positive value, expenses need to be reduced. The question asks what changes could have been made to the actual amounts this month to keep the actual net income at a positive value. The provided options suggest reducing spending on food, recreation, and clothes. While recreation is not explicitly listed, 'Food & Personal Items' and 'Clothes' are. Therefore, reducing spending in these categories could help achieve a positive net income.
Final Answer Based on our calculations, the actual net income is -$85. To make it positive, expenses need to be reduced. Option a suggests that less money could have been spent on food, recreation, and clothes, which aligns with our analysis.
Therefore, the correct answer is: The actual net income for the month is -$85. Less money could have been spent on food, recreation and clothes.
Select Correct Option The final answer is a. The actual net income for the month is − $85 . Less money could have been spent on food, recreation and clothes.
Examples
Budgeting is a crucial skill in personal finance. For example, if you're planning a road trip, understanding the difference between your planned budget and actual spending can help you stay on track. Suppose you budgeted $300 for gas but ended up spending $350 due to unexpected detours. By recognizing this overspending early, you can adjust other areas like food or lodging to compensate and avoid exceeding your overall trip budget. This proactive approach ensures you remain financially responsible and enjoy your trip without financial stress.
