Lauryn's wages were not as much as she had budgeted. How can her budget be modified so there will be a positive actual net income?

\begin{tabular}{|l|r|r|}
\hline
Monthly Budget & \begin{tabular}{r}
Budgeted \\
Amount
\end{tabular} & \begin{tabular}{r}
Actual \\
Amount
\end{tabular} \\
\hline
Income & & \\
Wages & \[tex]$1050 & \$[/tex]775 \\
\hline
Expenses & & \\
Car-gas & \[tex]$250 & \\
Insurance & \$[/tex]150 & \\
\hline
Food & \[tex]$120 & \\
Clothes & \$[/tex]300 & \\
\hline
College Savings & \[tex]$75 & \\
\hline
Recreation & \$[/tex]25 & \\
\hline
Net Income & \$130 & \\
\hline
\end{tabular}



Answer :

Certainly! Let's walk through the process step-by-step to determine how Lauryn's budget can be adjusted to yield a positive actual net income.

1. Determine the Budgeted Net Income:
- Lauryn's budgeted income: \[tex]$1050 - Budgeted expenses: - Car-gas: \$[/tex]250
- Insurance: \[tex]$150 - Food: \$[/tex]120
- Clothes: \[tex]$300 - College Savings: \$[/tex]75
- Recreation: \[tex]$25 Total budgeted expenses: \[ 250 + 150 + 120 + 300 + 75 + 25 = 920 \] Budgeted net income: \[ 1050 - 920 = 130 \] 2. Determine the Actual Net Income: - Lauryn's actual income: \$[/tex]775
- Actual expenses:
- We will initially consider the actual expenses the same as budgeted for calculation

Total budgeted expenses remain:
[tex]\[ 920 \][/tex]

Actual net income:
[tex]\[ 775 - 920 = -145 \][/tex]

So, Lauryn’s actual net income is [tex]\(-\$145\)[/tex], meaning she is overspending by \[tex]$145. 3. Adjust the Budget to Achieve a Positive Actual Net Income: For Lauryn to have a positive actual net income, her expenses need to be reduced by at least \$[/tex]145. We should make adjustments such that the overall expenses amount to less than or equal to her actual income of \[tex]$775. Here's one way to distribute the reductions in expenses: - Car-gas: Consider reducing by \$[/tex]50 (new amount \[tex]$200) - Clothes: Consider reducing by \$[/tex]100 (new amount \[tex]$200) - Food: Consider reducing by \$[/tex]45 (new amount \[tex]$75) These adjustments collectively reduce the expenses by: \[ 50 + 100 + 45 = 195 \] New total actual expenses: \[ 920 - 195 = 725 \] 4. Calculate the New Net Income: With new reduced expenses: \[ 775 - 725 = 50 \] Thus, Lauryn will have a positive actual net income of \$[/tex]50.

In summary, by reducing her Car-gas expenses by \[tex]$50, Clothes expenses by \$[/tex]100, and Food expenses by \[tex]$45, Lauryn can modify her budget to achieve a positive actual net income of \$[/tex]50.