What are the top categories for discretionary spending for the federal government?
Generally, a majority of the discretionary spending is budgeted towards national defense. The rest of discretionary spending is budgeted to other federal agency programs ranging from transportation, education, housing, social service programs, as well as science and environmental organizations.
What category did the federal government spend the most on?
As Figure A suggests, Social Security is the single largest mandatory spending item, taking up 38% or nearly $1,050 billion of the $2,736 billion total. The next largest expenditures are Medicare and Income Security, with the remaining amount going to Medicaid, Veterans Benefits, and other programs.
What is the largest discretionary spending category?
Discretionary Spending The largest of these programs are Health and Human Services, Education, and Housing and Urban Development. There also is the Overseas Contingency Operations fund that pays for wars or continuing military actions.
What are some of the categories of discretionary spending?
Some examples of areas funded by discretionary spending are national defense, foreign aid, education and transportation.
What are the six largest spending categories?
Most state and local government spending falls into one of six categories: elementary and secondary education, public welfare (which includes most Medicaid spending), higher education, health and hospitals, police and corrections, and highways and roads.
What are examples of discretionary spending?
Discretionary expenses are often defined as nonessential spending or, in other words, wants rather than needs. This means a business or household is still able to run even if all discretionary consumer spending stops. Meals at restaurants and entertainment costs are examples of discretionary expenses.
Who approves discretionary spending?
The authority for discretionary spending stems from annual appropriation acts, which are under the control of the House and Senate Appropriations Committees. Most defense, education, and transportation programs, for example, are funded that way, as are a variety of other federal programs and activities.
Who determines discretionary spending?
Discretionary spending refers to the portion of the budget that is decided by Congress through the annual appropriations process each year. These spending levels are set each year by Congress. This pie chart shows how Congress allocated $1.11 trillion in discretionary spending in fiscal year 2015.
What types of items will your discretionary spending cover?
Discretionary income is the amount of an individual’s income that is left for spending, investing, or saving after paying taxes and paying for personal necessities, such as food, shelter, and clothing. Discretionary income includes money spent on luxury items, vacations, and nonessential goods and services.
What is a good discretionary income?
Well, there is an answer. Spend 30 percent of your after-tax income on discretionary items. But there’s a huge catch: your necessities can consume only 50 percent of your after-tax pay before you can spend 30 percent on wants. The other 20 percent should go to debt or savings.
Is rent a discretionary expense?
While rent, mortgage payments, and groceries are necessary, discretionary expenses are those you incur voluntarily such as dining out or cable television. Your discretionary spending budget is only as big as the income you have available to fund it.
How do you spend discretionary income?
The three ways that discretionary income can be allocated include:
- Spending. When individuals and households spend more of their discretionary income on goods and services, vacations, luxury items, and other nonessential items, money is funneled towards businesses that provide those goods and services.
Which expense is considered a fixed discretionary expense?
A fixed expense is a period-specif expense, which means is and expense you paid over a fix time. If you think about, the definition of “fixed, discretionary expense” fits an entertainment subscription perfectly; therefore a music subscription service fee is a fixed, discretionary expense.
What are examples of fixed expenses?
While these fixed costs may change over time, the change is not related to production levels but rather new contractual agreements or schedules. Examples of fixed costs include rental lease payments, salaries, insurance, property taxes, interest expenses, depreciation, and potentially some utilities.
Is groceries a fixed expense?
Fixed expenses are your weekly, monthly, or annual bills that don’t fluctuate. These include things like mortgage or rent payments, car payments, insurance premiums, utility bills, and the average amount you spend on groceries.
Is an example of a discretionary fixed cost expense?
Examples of discretionary fixed costs include advertising, research, public relations, management development programs, and internships for students. Discretionary fixed costs can be cut for short periods of time with minimal damage to the long-run goals of the organization.
What are examples of non discretionary expenses?
Nondiscretionary expenses are things you must pay for or buy, including the following:
- Rent or mortgage.
- Car payments.
Is Depreciation a discretionary fixed cost?
Examples of committed fixed costs include depreciation of machinery, insurance of premises and machinery, rental of premises, maintenance costs etc. Examples of discretionary fixed costs include advertising costs, public relations expenses, employee training and development costs etc.
What are mixed costs?
Mixed costs are costs that contain a portion of both fixed and variable costs. Common examples include utilities and even your cell phone!
How are mixed costs treated?
Y = a + bx The best way to deal with mixed costs in a budget is to use a formula in place of a single number for a mixed cost, with the cost automatically varying based on a designated activity level (such as sales).
How do you know if a cost is mixed?
A mixed cost is expressed by the algebraic formula y = a + bx, where:
- y is the total cost.
- a is the fixed cost per period.
- b is the variable rate per unit of activity.
- x is the number of units of activity.
Is salary a mixed cost?
Mixed expenses consist of a constant or fixed portion and a variable portion. For example, sales salaries would be a mixed expense if each sales person’s compensation is $2,000 per month plus 3% of the sales generated by the employee. Automobile expense is a mixed expense in relationship to miles driven.
What are examples of mixed cost?
Utilities including electricity, water and natural gas are usually mixed costs. You are charged a fixed rate for using a base amount and then pay an additional variable charge for any usage over the base amount. For example, your water company charges you a fixed $75 charge for using up to 500 gallons of water.
Is salary fixed or variable cost?
Any employees who work on salary count as a fixed cost. They earn the same amount regardless of how your business is doing. Employees who work per hour, and whose hours change according to business needs, are a variable expense.
How do you calculate fixed costs?
Take your total cost of production and subtract your variable costs multiplied by the number of units you produced. This will give you your total fixed cost.
What is the formula of variable cost?
The formula used to calculate the variable cost: Total Variable Cost = Total Quantity of Output x Variable Cost Per Unit of Output.
How do I calculate variable costs?
Calculate total variable cost by multiplying the cost to make one unit of your product by the number of products you’ve developed. For example, if it costs $60 to make one unit of your product, and you’ve made 20 units, your total variable cost is $60 x 20, or $1,200.
How do we calculate average cost?
In accounting, to find the average cost, divide the sum of variable costs and fixed costs by the quantity of units produced. It is also a method for valuing inventory. In this sense, compute it as cost of goods available for sale divided by the number of units available for sale.