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Look at this monthly budget:

| | Budgeted | Actual |
|------------------|------------|------------|
| Net income | [tex]$400.00 | $[/tex]375.00 |
| Total income | [tex]$400.00 | $[/tex]375.00 |
| Rent | -[tex]$200.00 | -$[/tex]200.00 |
| Bus pass | -[tex]$20.00 | -$[/tex]20.00 |
| Total fixed | -[tex]$220.00 | -$[/tex]220.00 |
| Food | -[tex]$75.00 | -$[/tex]125.00 |
| Discretionary | -[tex]$30.00 | -$[/tex]50.00 |
| Total variable | -[tex]$105.00 | -$[/tex]175.00 |
| Savings | [tex]$75.00 | -$[/tex]20.00 |

What is the simplest change that can be made to the budget to produce more savings next month?

A. Add to fixed expenses.
B. Decrease food expenses.
C. Reduce rent payments.
D. Increase total income.

Sagot :

To determine the simplest change that can be made to produce more savings next month, let's analyze the budget.

First, identify the area where the actual expenses are significantly higher than the budgeted amounts. Upon examining the data, it is clear that:

- The budgeted amount for food expenses is [tex]$75, but the actual spending is $[/tex]125.

Now, let's calculate the difference:

[tex]\[ \text{Actual Food Expenses} - \text{Budgeted Food Expenses} = 125 - 75 = 50 \][/tex]

This indicates that there is an over-expenditure of [tex]$50 on food. By reducing the actual food expenses to the budgeted amount ($[/tex]75), we save [tex]$50, which can be directly added to the savings. So, by decreasing the food expenses to align with the budgeted amount of $[/tex]75, the savings will increase by $50.

Therefore, the simplest change that can be made to the budget to produce more savings next month is to:

Decrease food expenses.

Thus, the correct answer is:
- Decrease food expenses.