Chapter 10 Prepare a Budget
1. A cash flow analysis is a type of budget that helps people plan for future spending and savings.
2. Some examples of variable expenses are utility bills and entertainment costs.
3. Andy leaves a certain radio on all day while he works. This radio requires 125 watts of electricity. At a price
per kilowatt-hour of $0.10, it costs $0.10 to play the radio all day.
4. Tamika created this pie chart of her entertainment budget. According to the chart, if Tamika’s budget is $125
for entertainment, $36 is budgeted for shopping.
5. Net worth is the difference between a person’s assets and their liabilities. Net worth can be a positive number
or a negative number.
6. A nursery located in Florida uses a water meter to measure their water usage in ccf. They are charged $0.36
per ccf of water. Their last meter reading was 123,692 and their present reading is 127,394. For this usage, the
nursery was charged $332.72.
7. The Yamamotos use natural gas to heat their home. Last year they paid $14.50 per thousand cubic feet (Mcf).
The price increased 20% this year so they are now paying $17.4 per Mcf.
8. Randy and Jake are brothers living in the same city in homes that are about the same age and size. One
brother has recently purchased an energy-efficient gas furnace while the other brother relies on an older, less
efficient, oil furnace. By comparing the lines of the graph, it appears that Randy has the more energy efficient
furnace.
9. A spreadsheet is an example of an electronic matrix.
10. Jane wants to keep her debt-to–income ratio at the recommended 15% or lower. The sum of Jane’s assets is
$12,000 and the sum of her liabilities is $2,300, so she easily falls within the recommended amount.
11. Last month, Marybeth was charged $112 for 945 kWh of electricity. How much did the company charge her
per kWh, to the nearest cent?
12. Sarah lives in a part of the country where there are droughts. Consequently, the water company increases the
cost per ccf of water based on usage. The piecewise function shows the rate schedule.
If Sarah used 210 ccf of water last month, what was she charged?
13. Which statement is NOT part of a debt-reduction plan?
A. Lower debts with the highest interest rates.
14. Jose and Lisa Sanchez created a spreadsheet to chart their income and expenses for the month. The sum of
their fixed expenses is in cell B10, the sum of their variable expenses is in cell B23, and the sum of their pro-
rated non-monthly expenses is in cell B40. What formula should be entered in the spreadsheet cell that contains
their total expenses?
A. =SUM(B10-B40)
15. A single woman uses an online cash flow calculator which reveals a cash flow of 203. What does this
mean?
A. She is earning more than she is spending.
16. Mrs. Watanabe is choosing a cell phone plan. One plan costs $35 a month and includes 450 minutes. The
charge for each minute over 450 is $0.16. The company also offers an unlimited calling plan with a $55
monthly charge. At how many minutes would the cost of the two plans be the same?
17. Ralph has budgeted $175 for entertainment. He uses this money to go out on dates for $35 or to go out with
his friends for $15. Which budget line equation represents the situation?
A. 35x – 15y = 180
18. Mrs. Kalbrisa budgets $125 a month for entertainment. She has allocated $10 for the movies and $25 for
dining out. She constructs the following budget line graph to represent the situation, where x is the number of
movies and y is the number of times she dines out in a month. What combination does NOT fall within her
budgeted amount for entertainment?
19. Which is NOT an example of a budget?
20. Manuel works for the water company as a meter reader. The meter below is the Jansen’s water meter. What
is the reading, in ccf, on the meter shown?
21. Xavier’s monthly assets and liabilities are in the table below. What is Xavier’s debt–to-income ratio?
Monthly Liabilities
Monthly
Assets
Rent
$750
Gross Salary Full-time job
Student Loan
$100
Gross Salary Part-time job
Credit Card
$125
Car loan
$210
22. Katelyn is shopping for a cellular phone service. Trenton Bell charges a monthly fee of $40 for up to 500
minutes. For every minute over 500, there is an $0.18 charge. Write a piecewise function to represent the cost of
this plan.
23. Construct a bar graph using the information below on transportation-related costs.
Transportation Costs
Jan
Feb
Mar
Apr
May
June
Car Payment
210
210
210
210
210
210
Insurance
45
45
45
45
45
45
Gasoline
110
115
120
110
90
100
Parking
30
30
30
30
30
30
Repairs and Maintenance
0
0
35
175
0
35
24. Richard and Samantha are charting their monthly cash flow. They have some expenses like car repairs and
vacations that are not paid each month. How can they account for these non-monthly expenses?
25. Last year, Maria spent $2,388 for natural gas. This year, she decided to use balance billing. What will her
monthly payment be this year?
26. The Lisbon’s new heat pump cost $4,500. They bought it to replace their old furnace and air conditioner
which cost about $2,800 a year to run. The heat pump will save them approximately 39% a year. In how many
years will the heat pump pay for itself? Round to the nearest tenth.
27. Use the pie chart of health-related and personal care items. If the Lee family has $800 per month budgeted
for heath-related items, how much do they have budgeted for each of the four categories below?
28. A certain refrigerator requires 170 watts of electricity when it is running. It typically runs about 20 minutes
per hour. How much does it cost to run this refrigerator for one year if the cost per kWh is $0.11?
29. Roderick has an Internet service that charges by the hour. This piecewise function shows the cost of the
Internet service based on the number of hours that Roderick uses the Internet.
Last month, Roderick used the Internet for 7.5 hours. What was he charged?
30. Michelle’s last electric bill listed a previous reading of 17,934 kWh. This month, the electric meter reading
is 18,796 kWh. If the electric company charges $0.09 per kWh, what is the charge for usage?