RWM Unit 3 Budgeting

Any money you receive such as an allowance or paycheck

• Income

• Fixed Expense

• Opportunity Cost

• Emergency Fund

Nate has apptied for a position with a computer manufacturing company. He has been reviewing his

monthly expenses so he can negotiate a salary. His monthly living expenses are $879, his monthly fixed expenses are $1207.25, and his annual expenses total $1965 per year. What is Nate's total monthly expenditure?

Answer explanation

First, we must find the monthly share of annual expenses.

1965 / 12 = 163.75

Now we add up all the monthly expenses.

879 + 1207.25 + 163.75 = 2250 per month

Nate's total monthly expenditure is $2,250.00.

15. The Silversteins used records of their past expenditures to complete their budget sheet for the

upcoming new year. If their monthly living expenses are $912, their monthly fixed expenses are $1,457,

and their annual expenses are $3,078, what amount should they expect to spend monthly?

Answer explanation

First we must find the monthly share of annual expenses.

3078 / 12 = 1539

Now we can add the expenses up to find their monthly expenses.

912 + 1475 + 1539 = 3926

The Silversteins should expect to spend 3926 on expenditures per month.

The Scotts prepared an expense summary. They had planned to spend $217.25 on transportation

for the previous month, but actually spent $212.50. How much more or less did they spend on

transportation than they had budgeted for?

Answer explanation

Predicted - actual = answer

217.25 - 212.50 = 4.75

The Scotts spend 4.75 LESS on transportation than they expected.

The Potters used records of their past expenditures to complete their budget sheet for the

upcoming new year. If their monthly living expenses are $848, their monthly fixed expenses are $1,305,

and their annual expenses are $3,816, what amount should they expect to spend monthly?

Answer explanation

First we must find the monthly share of the annual expenses.

3816 / 12 = 318

Now we can add up all the monthly expenditures.

848 + 1305 + 318 = 2471

The Potters should expect to spend 2471 per month on expenditures.

The Hutton's records for the past six months show that their expenditures totaled $2,786, $3,001,

$2,875, $2,663, $2,471, and $2,803. What is their average monthly expenditure for the six months?

Answer explanation

Take all the monthly expenditures, add them up, and then divide by the number of months we added (6)

2786 + 3001 + 2875 + 2663 + 2471 +2803 = 16599

16599 / 6 =2766.50

The Hutton's average monthly expenditure is 2766.50

A predictable amount of money spent to buy something or do something that is the exact same amount every time

• Variable Expense

• Income

• Emergency Fund

• Fixed Expense

Detailed plan of how you are going to use your money to pay for things you want and need.

• Budget

• Income

• Periodic Expenses

• Cash Flow

Payment that costs a different amount each time

• Fixed Expense

• Periodic Expense

• Variable Expense

• Income

Payments that arise periodically throughout the year less than once a month

• Variable Expesne

• Fixed Expense

• Periodic Expense

• Income