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

Question

This is a Household Budget Question.

Answer all parts of this question:

When the Walters household checked their Analysed Cash Book at the end of December 2015, they discovered that their actual income and expenditure for the 12 months differed from the budgeted figures (contained in the Budget Comparison Statement on page 9 of Section A) due to the following:

• The salaries of the Walters household increased by 3%.
• There are three children in the household. The monthly child benefit increased by €5 per child from 1 April 2015.
• The actual interest received for the year was 5% less than budgeted.
• The Walters household won €600 in a local lottery.
• Mortgage payments decreased by €35 per month from 1 August 2015.
• The Walters household have a no claims bonus, so their car insurance was 12% less than budgeted.
• The house insurance was 8% greater than budgeted.
• Car costs were 4% less than budgeted.
• Clothing and footwear costs were as budgeted.
• Light and heat costs were €6 per month greater than budgeted.
• Medical insurance was 8% greater than budgeted, due to medical insurance inflation.
• Entertainment costs were €20 less per month except for the two months of April and December.
• Due to a family occasion, presents cost an additional €120.
• The family holiday cost 4% less than budgeted.

(A) Using the Budget Comparison Statement on page 9 of Section 4, enter the appropriate figures into the 'Actual' column.
Show the differences between the 'Actual' and 'Budget' figures by completing the column marked 'Difference'. Use a 'plus' sign if 'Actual' is GREATER than the 'Budget' figure. Use 'minus' sign if 'Actual' is LESS than the 'Budget' figure.

Note: Example: 
Budget 
100 
Actual 
180 
Difference 
+ 80
Total 
700 
730 
+ 30

Answer the following parts (B) and (C) in the spaces provided on page 10 of Section A.

(B) (i) What was the budgeted closing cash at the end of 2015?
(ii) How much had the Walters household budgeted to save during 2015?
(iii) State by how much the Walters household exceeded their budgeted Total Expenditure.
(iv) What was the actual closing cash at the end of 2015?
(v) Explain one reason why the mortgage payments decreased in August.

(C) (i) Outline two pieces of financial advice you would give the Walters household in light of the 'Actual' 2015 Budget.
(ii) Explain the term 'no claim bonus'.

This is a Household Budget Question - Junior Cycle Business Studies - Question 1 - 2016

Worked Solution & Example Answer:This is a Household Budget Question - Junior Cycle Business Studies - Question 1 - 2016

Using the Budget Comparison Statement, enter figures into the 'Actual' column.

What was the budgeted closing cash at the end of 2015?

How much had the Walters household budgeted to save during 2015?

State by how much the Walters household exceeded their budgeted Total Expenditure.

What was the actual closing cash at the end of 2015?

Explain one reason why the mortgage payments decreased in August.

Outline two pieces of financial advice you would give the Walters household in light of the 'Actual' 2015 Budget.

Explain the term 'no claim bonus'.

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