Look at this monthly budget.

\textbf{Monthly Budget}
\begin{tabular}{|l|l|l|}
\hline & Budgeted & Actual \\
\hline Net income & [tex]$\$[/tex] 400.00[tex]$ & $[/tex]\[tex]$ 375.00$[/tex] \\
\hline Total income & [tex]$\$[/tex] 400.00[tex]$ & $[/tex]\[tex]$ 375.00$[/tex] \\
\hline Rent & [tex]$-\$[/tex] 200.00[tex]$ & $[/tex]-\[tex]$ 200.00$[/tex] \\
\hline Bus pass & [tex]$-\$[/tex] 20.00[tex]$ & $[/tex]-\[tex]$ 20.00$[/tex] \\
\hline Total fixed & [tex]$-\$[/tex] 220.00[tex]$ & $[/tex]-\[tex]$ 220.00$[/tex] \\
\hline Food & [tex]$-\$[/tex] 75.00[tex]$ & $[/tex]-\[tex]$ 125.00$[/tex] \\
\hline Discretionary & [tex]$-\$[/tex] 30.00[tex]$ & $[/tex]-\[tex]$ 50.00$[/tex] \\
\hline Total variable & [tex]$-\$[/tex] 105.00[tex]$ & $[/tex]-\[tex]$ 175.00$[/tex] \\
\hline Savings & [tex]$\$[/tex] 75.00[tex]$ & $[/tex]-\[tex]$ 20.00$[/tex] \\
\hline
\end{tabular}

What is the simplest change that can be made to the budget to produce more savings next month?

A. Add to fixed expenses.
B. Decrease food expenses.
C. Reduce rent payments.
D. Increase total income.



Answer :

Let's analyze the provided monthly budget and actual expenses to determine an effective change to increase savings next month.

### Budgeted vs. Actual Expenses:

1. Net Income:
- Budgeted: [tex]$400.00 - Actual: $[/tex]375.00

2. Total Income:
- Budgeted: [tex]$400.00 - Actual: $[/tex]375.00

3. Fixed Expenses:
- Rent:
- Budgeted: [tex]$-200.00 - Actual: $[/tex]-200.00
- Bus Pass:
- Budgeted: [tex]$-20.00 - Actual: $[/tex]-20.00
- Total Fixed Expenses:
- Budgeted: [tex]$-220.00 - Actual: $[/tex]-220.00

4. Variable Expenses:
- Food:
- Budgeted: [tex]$-75.00 - Actual: $[/tex]-125.00
- Discretionary:
- Budgeted: [tex]$-30.00 - Actual: $[/tex]-50.00
- Total Variable Expenses:
- Budgeted: [tex]$-105.00 - Actual: $[/tex]-175.00

5. Savings:
- Budgeted: [tex]$75.00 - Actual: $[/tex]-20.00

### Analysis:
- The fixed expenses are identical for both budgeted and actual, totaling [tex]$-220.00. - The variable expenses show a significant difference. The actual food expense is $[/tex]-125.00, which is [tex]$50.00 higher than the budgeted $[/tex]-75.00.
- Similarly, the actual discretionary expense is [tex]$-50.00, which is $[/tex]20.00 higher than the budgeted [tex]$-30.00. - The total variable expenses were budgeted at $[/tex]-105.00 but actually amounted to [tex]$-175.00, a $[/tex]70.00 increase.

### Conclusion:
Given the provided figures, the variable expenses, particularly food expenses, show a noticeable increase. To achieve more savings for the next month:

- Decrease food expenses: This is the simplest and most immediate way to produce more savings. If food expenses are reduced, actual expenses will be closer to the budgeted amounts, thereby increasing the savings.

Therefore, the simplest and most effective change is to decrease food expenses.