Junior Cycle Business Studies Budgets: This is a Household Budget Quest

Question

This is a Household Budget Question.

Answer all parts of this question:

(A) On page 9 of Section A is an Original Budget and a Revised Budget form for the O’Driscoll household from July to September 2017. After preparing the Original Budget, Ms O’Driscoll was informed that she would be getting a promotion in her job. However, Mr O’Driscoll has decided to take parental leave for July and August. The O’Driscoll household decided to revise their Budget due to the changed circumstances.

You are required to complete the Revised Budget, taking the following into account:

- Ms O’Driscoll will receive €4,830 net monthly from 1 July 2017.
- Mr O’Driscoll’s parental leave will result in no salary for July and August 2017.
- The O’Driscoll household will receive €75 from selling old furniture on e-bay in July.
- Mortgage repayments will increase by 2% from 1 September 2017.
- The O’Driscoll household will make one loan repayment in July and will repay the balance of the loan, €5,100, in August.
- Annual Insurance will increase to €1,944, payable monthly from 1 August 2017.
- Household costs will decrease by 15% per month from 1 July 2017.
- Entertainment costs will decrease by 45% for July and August 2017.
- The O’Driscoll household planned holiday in August will be postponed.
- All other income and expenditure will remain the same.

(B) Calculate what percentage increase Ms O’Driscoll will receive as a result of her promotion. Show your workings.

(ii) Explain the term ‘Discretionary Expenditure’.

(iii) In the Original Budget, name a month in which planned income is greater than planned expenditure.

(iv) In the Original Budget, how much did the O’Driscoll household expect to save in the three months?

(v) Is the Revised Budget a good one? Give one reason for your answer.

This is a Household Budget Question - Junior Cycle Business Studies - Question 1 - 2017

Worked Solution & Example Answer:This is a Household Budget Question - Junior Cycle Business Studies - Question 1 - 2017

Calculate what percentage increase Ms O’Driscoll will receive as a result of her promotion.

Explain the term ‘Discretionary Expenditure’.

In the Original Budget, name a month in which planned income is greater than planned expenditure.

In the Original Budget, how much did the O’Driscoll household expect to save in the three months?

Is the Revised Budget a good one? Give one reason for your answer.

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