This is a Household Budget Question - Junior Cycle Business Studies - Question 1 - 2015
Question 1
This is a Household Budget Question.
Answer all parts of this question:
(A) On page 9 of Section A is a partially completed summary of the Dwyer household budget f... show full transcript
Worked Solution & Example Answer:This is a Household Budget Question - Junior Cycle Business Studies - Question 1 - 2015
Step 1
What is a budget?
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Answer
A budget is defined as a forecast or plan on future income and expenditure for a specific time period. It serves as a guide for managing financial resources effectively.
Step 2
Outline two reasons for preparing a budget.
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Answer
To estimate if there will be a surplus and what can be done with it, or the method to eliminate it.
To assess the viability of future expenses and ensure that the household remains within its financial means.
Step 3
Name any month the Dwyer household plan to have a deficit and the amount of the deficit.
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Answer
The Dwyer household plans to have a deficit in:
Month: August
Amount: €210
Step 4
Suggest one way of overcoming this deficit.
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One way to overcome the deficit is by reducing the amount they intend to save or cutting back on discretionary expenses.
Step 5
Did the Dwyer household plan to live within its income for the period July to October 2015? Give one reason for your answer.
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Yes, the Dwyer household planned to live within its income since they are saving €1,800 which could be utilized to cover any shortfall.
Step 6
Show, by ticking (✓) the correct box, whether the following expenses would be classified as Fixed, Irregular or Discretionary in its household budget:
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Car Expense Classification:
NCT Fee: Fixed ✓
Diesel: Irregular ✓
New Alloy Wheels: Discretionary ✓
Car Service: Discretionary ✓
Step 7
Complete the Cheque and Counterfoil.
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