Let's go through Lauryn's budget step-by-step to determine how to achieve a positive actual net income.
### Step 1: Calculate Total Budgeted Expenses
First, sum up all the budgeted expenses: - Car-gas: [tex]$250
- Car insurance: $[/tex]150 - Food: [tex]$120
- Clothes: $[/tex]300 - College Savings: [tex]$75
- Recreation: $[/tex]25
Total budgeted expenses: \[tex]$920
### Step 2: Calculate Budgeted Net Income
Budgeted income (wages): \$[/tex]1050
Net income = Budgeted income - Budgeted expenses [tex]\[
Net\; income = 1050 - 920 = 130
\][/tex]
Budgeted net income: \[tex]$130
### Step 3: Calculate Actual Expenses
Since the actual expenses are not specified individually, we'll use the same total as the budgeted expenses (\$[/tex]920).
Actual total expenses: \[tex]$920
### Step 4: Calculate Actual Net Income with Actual Wages
Given actual wages: \$[/tex]775
Net income = Actual income - Actual expenses [tex]\[
Net\; income = 775 - 920 = -145
\][/tex]
Actual net income: [tex]\(-\$145\)[/tex] (This is the shortfall.)
### Step 5: Determine the Adjustment Needed
To achieve a positive net income, Lauryn needs at least a net income of \[tex]$0. Therefore, she needs to cover the shortfall of \(-\$[/tex]145\) to break even, and ideally more to have a positive net income.
Lauryn needs to either increase her actual income by at least \[tex]$145 or decrease her expenses by at least \$[/tex]145 to achieve non-negative net income.
Steps for modifying the budget:
1. Increase Income: Lauryn could look for additional sources of income or extra work to cover the \[tex]$145 shortfall.
2. Reduce Expenses: Lauryn may need to cut some of her budgeted expenses by at least \$[/tex]145. Here are some suggestions: - Reduce the car-gas and insurance budget. - Cut back on clothes or recreation expenses. - Look for discounts or cheaper alternatives for food.
By making an adjustment, either increasing her income by \[tex]$145 or decreasing her expenses by \$[/tex]145, Lauryn can set her budget to achieve a positive actual net income.
