Question

monthly budget

	budgeted amount	actual amount
expenses - rent	$450	$
expenses - utilities	$150	$
expenses - food	$220	$
expenses - clothes	$200	$
expenses - cell phone	$75	$
net income	$155	$

a. this budget can be modified by increasing the amount spent on food and utilities and decreasing the amount spent on clothes and rent, thereby maintaining a positive actual net income.
b. this budget can be modified by reducing the amount spent on rent and utilities, thereby reducing overall expenses to have the maximum amount of money for all other expenses.
c. this budget can be modified by reducing the amount spent on food and clothes, thereby

the actual income for this month has been reduced by $200. how can this budget be modified so there will be a positive actual net income?
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Explanation:

Step1: Calculate total budgeted expenses

First, sum all budgeted expense items:
$$\$450 + \$150 + \$220 + \$200 + \$75 = \$1095$$

Step2: Calculate original budgeted net income

Subtract total expenses from budgeted wages:
$$\$1250 - \$1095 = \$155$$

Step3: Calculate new actual income

Reduce budgeted wages by $\$200$:
$$\$1250 - \$200 = \$1050$$

Step4: Find required total expense cut

To get positive net income, total actual expenses must be less than $\$1050$. Calculate the needed reduction:
$$\$1095 - \$1050 = \$40$$
So total expenses need to be cut by at least $\$40$ to make net income positive.

Answer:

To achieve a positive actual net income with the reduced $\$1050$ income, total monthly expenses must be reduced by at least $\$40$. Option b (reducing rent and utilities to lower overall expenses) and option c (reducing food and clothing costs) are valid modifications, as either approach can cut the required $\$40$ from total expenses to ensure actual net income is positive.

The actual net income will be positive when:
$$\text{Actual Net Income} = \$1050 - \text{Total Actual Expenses} > 0$$
So $\text{Total Actual Expenses} < \$1050$ (a reduction of at least $\$40$ from the original $\$1095$ total expenses).