Question

Michelle has the following monthly expenses: $490 rent, $300 groceries, $90 movies, $69 clothes, $130 cell phone, $99 cable television, $30 Internet, $212 car loan, and $127 insurance. She wants to increase her discretionary income but doesn't know which expenses she can cut. Identify the variable expenses she can either lower or eliminate.
A.
$300 groceries
$69 clothes
$127 insurance
$99 cable television
$130 cell phone
$90 movies
$30 internet
B.
$130 cell phone
$90 movies
$69 clothes
$99 cable television
C.
$300 groceries
$69 clothes
$99 cable television
$130 cell phone
$90 movies
$30 internet
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Answer 1

To help Michelle increase her discretionary income, we need to identify which of her expenses are variable and can be lowered or eliminated. Here's a breakdown of her monthly expenses categorized into fixed and variable:

**Fixed Expenses:** (Typically essential and less flexible)
- $490 rent
- $212 car loan
- $127 insurance

**Variable Expenses:** (More flexible and can be adjusted)
- $300 groceries (can potentially be lowered)
- $90 movies (can be eliminated or reduced)
- $69 clothes (can potentially be lowered)
- $130 cell phone (may have options to lower)
- $99 cable television (can potentially be eliminated or reduced)
- $30 internet (may be reduced depending on plans)

Now, looking at the options provided:

**A.**
- $300 groceries (variable, can be lowered)
- $69 clothes (variable, can be lowered)
- $127 insurance (fixed, cannot be cut)
- $99 cable television (variable, can be reduced or eliminated)
- $130 cell phone (variable, may have options to lower)
- $90 movies (variable, can be eliminated)
- $30 internet (variable, can be reduced)

**B.**
- $130 cell phone (variable, may have options to lower)
- $90 movies (variable, can be eliminated)
- $69 clothes (variable, can be lowered)
- $99 cable television (variable, can be reduced or eliminated)

**C.**
- $300 groceries (variable, can be lowered)
- $69 clothes (variable, can be lowered)
- $99 cable television (variable, can be reduced)
- $130 cell phone (variable, may have options to lower)
- $90 movies (variable, can be eliminated)
- $30 internet (variable, can be reduced)

Based on her ability to reduce or eliminate expenses, options **B** and **C** provide a set of variable expenses she can cut. However, **B** is slightly more targeted, focusing on the items that are most likely to be cut easily without affecting her essential needs.

Thus, the best answer is:
**B.**
- $130 cell phone
- $90 movies
- $69 clothes
- $99 cable television