Creating a Hypothetical Budget Portfolio Activity (Corrections)

Creating a Hypothetical Budget – Portfolio Activity (corrections)

Expense / Amount
Rent (monthly) / $657.00
Telephone (monthly) / $56.34
Groceries (weekly) / $56.00
Clothing (monthly with ½ job related) / $106.00
Water & Electric (monthly) / $98.87
Weekly Dinner & Movie / $40.00

You are paid $11.75/hr. You work 40 hr/wk. Your deductions are FICA (7.65%), Federal tax withholding (10.75%), and state tax withholding (7.5%)

1) Assuming you budget a month as 4 weeks, how much is your total realized income, fixed expenses, and discretionary expenses.

1,549.56

2) If you are able to work 20 hours of overtime the next month and are paid 1.5 times your regular rate, how does this change your budget for that month?

$2,324.32

3) How much can you put towards savings each month if you eliminated your discretionary expenses?

$258.87

Be sure to include in your response:

· A detailed budget showing income and expenses for the two different months.

· Answers to the original questions.

· An explanation for how you calculated the first 40 hours of income and then the additional 20 hours of overtime.

How I calculated the income from 40 hours then additional 20 hours was I added up 11.75 + 1.5 then multiplied that by 40

Therefore I got $705

Month 1

Realized Income: / Amount
11.75/hr, 40 hours a week / $470
Tax deductions FICA (7.65%), (10.75% / 387.39
Total Income / $1,549.56
Expense (Fixed): / Amount
Rent / $657.00
Telephone / $56.34
Water and electricity / $98
groceries / $224
Total Expenses (Fixed) / 1,035.5
Expense (Discretionary):
Weekly dinner/movie / $160
Clothing / $98.87
Total Expenses (Discretionary) / $258.87
Total Expenses (Fixed & Discretionary): / 1,294.37

Month 2

Realized Income: / Amount
11.75/hr, 40 hours a week additional 20/hr / $705
Tax deductions FICA (7.65%), (10.75% / 581.08
Total Income / $2,324.32
Expense (Fixed): / Amount
Rent / $1,314
Telephone / $112.68
Water and electricity / $196
Groceries / $448
Total Expenses (Fixed) / 2,070.68
Expense (Discretionary):
Weekly dinner/movie / $320
Clothing / $197.74
Total Expenses (Discretionary) / $517.74
Total Expenses (Fixed & Discretionary): / 2,588.42