Question

chapter 8
name carleisha
activity 8.2 budget for bill and maura jones
directions: prepare a monthly and yearly budget for bill and maura jones based on the following
information. the joneses hope to invest $100 monthly in a college fund.
average monthly net paychecks total $2,285
average monthly expenses:
rent $850
utilities 180
gasoline 100
car payment 220
car maintenance 50
insurance (car, life, health) 120
groceries 300
clothing 75
telephone 45
entertainment 100
miscellaneous 50
personal care 25
gifts and donations 20
savings to be determined
budget
bill and maura jones
income
net paychecks $2,285
other income
total income
expenses
fixed expenses:
rent $850
utilities
car payment
insurance
total fixed expenses
variable expenses:
telephone
gasoline
car repairs and maintenance
cable television
groceries
clothing
personal care
recreation and entertainment
gifts and donations
miscellaneous
other
total variable expenses
total fixed and variable expenses
cash surplus (total income minus total expenses)
allocation of surplus:

Explanation:

Step1: Calculate monthly total income

Only net paychecks are given as income, so monthly total income is $2,285. Yearly total income is $2,285\times12 = $27,420$.

Step2: Calculate monthly fixed expenses

Fixed expenses: Rent ($850$), Utilities ($180$), Car payment ($220$), Insurance ($120$).
Total fixed expenses = $850 + 180+220 + 120=\$1,370$.
Yearly fixed expenses = $1,370\times12=\$16,440$.

Step3: Calculate monthly variable expenses

Variable expenses: Gasoline ($100$), Clothing ($75$), Telephone ($45$), Entertainment ($100$), Miscellaneous ($50$), Personal care ($25$), Gifts and donations ($20$), Groceries ($300$), Car maintenance ($50$).
Total variable expenses = $100+75 + 45+100+50+25+20+300+50=\$765$.
Yearly variable expenses = $765\times12=\$9,180$.

Step4: Calculate total monthly and yearly expenses

Total monthly expenses = Total fixed + Total variable = $1,370+765=\$2,135$.
Total yearly expenses = $16,440 + 9,180=\$25,620$.

Step5: Calculate cash surplus

Monthly cash surplus = Total income - Total expenses = $2,285-2,135=\$150$.
Yearly cash surplus = $27,420-25,620=\$1,800$.

Answer:

Income:

• Net paychecks: Monthly $\$2,285$, Yearly $\$27,420$
• Other income: Monthly $\$, Yearly $\$
• Total income: Monthly $\$2,285$, Yearly $\$27,420$

Expenses - Fixed:

• Rent: Monthly $\$850$, Yearly $\$10,200$
• Utilities: Monthly $\$180$, Yearly $\$2,160$
• Car payment: Monthly $\$220$, Yearly $\$2,640$
• Insurance: Monthly $\$120$, Yearly $\$1,440$
• Total fixed expenses: Monthly $\$1,370$, Yearly $\$16,440$

Expenses - Variable:

• Telephone: Monthly $\$45$, Yearly $\$540$
• Gasoline: Monthly $\$100$, Yearly $\$1,200$
• Car repairs and maintenance: Monthly $\$50$, Yearly $\$600$
• Groceries: Monthly $\$300$, Yearly $\$3,600$
• Clothing: Monthly $\$75$, Yearly $\$900$
• Personal care: Monthly $\$25$, Yearly $\$300$
• Recreation and entertainment: Monthly $\$100$, Yearly $\$1,200$
• Gifts and donations: Monthly $\$20$, Yearly $\$240$
• Miscellaneous: Monthly $\$50$, Yearly $\$600$
• Total variable expenses: Monthly $\$765$, Yearly $\$9,180$

Total fixed and variable expenses: Monthly $\$2,135$, Yearly $\$25,620$

Cash surplus: Monthly $\$150$, Yearly $\$1,800$

Allocation of surplus (assuming $\$100$ monthly for college fund as per instruction, remaining $\$50$ monthly and $\$600$ yearly for other savings):

• College fund: Monthly $\$100$, Yearly $\$1,200$
• Other savings: Monthly $\$50$, Yearly $\$600$