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Celina Makau and her family want to save money for a holiday to Cape Town in December. Celina earns R12,000 a month and her husband, Zane, earns R14,300 a month. The family has to save R2,000 per month to ensure they have sufficient money to cover the expenses for the trip to Cape Town.

Table 1: Income and Expenditure for the household for August 2022
\begin{tabular}{|l|c|c|}
\hline
& Income & Expenses \\
\hline
Celina Salary & R12,000 & \\
\hline
Zane Salary & R14,300 & \\
\hline
Water \& electricity & & R1,500.00 \\
\hline
Rent & & R5,200.00 \\
\hline
Groceries & & R4,500.00 \\
\hline
Car insurance & & R875.00 \\
\hline
Cell phone contract (2 phones) & & R1,200.00 \\
\hline
Medical Aid (family) & & R2,400.00 \\
\hline
School fees (2 children) & & B \\
\hline
Fuel & & R2,350.00 \\
\hline
Entertainment & & R1,400.00 \\
\hline
Car instalment & A & R3,500.00 \\
\hline
TOTAL & & R25,075 \\
\hline
\end{tabular}

1.1 Refer to the table above and answer the questions that follow.

1.1.1 Briefly explain the difference between fixed and variable expenses. (2)



Answer :

GinnyAnswer
Certainly! To understand fixed and variable expenses, let's look at their definitions and examples:

### Fixed Expenses
These are costs that do not change month-to-month. They remain constant irrespective of the family's activities or behavior. Fixed expenses are predictable and usually contractual.

Examples from the table include:
- Rent (R5 200)
- Car Insurance (R875)
- Cell Phone Contract (R1 200)
- Medical Aid (R2 400)
- School Fees (B, constant whether known or unknown)
- Car Instalment (R3 500)

### Variable Expenses
These are costs that fluctuate each month based on the family's consumption and activities. Variable expenses can vary significantly, depending on lifestyle changes and other external factors.

Examples from the table include:
- Water & Electricity (R1 500)
- Groceries (R4 500)
- Fuel (R2 350)
- Entertainment (R1 400)

To summarize:
- Fixed Expenses: Costs that are stable each month (e.g., rent, car instalment).
- Variable Expenses: Costs that vary each month (e.g., groceries, fuel).

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