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.
