Resse is analyzing her actual income and expenses and comparing the results to her annual budgeted amounts. She was pleased to see that her net income was higher than expected by $1,500 due to a job promotion, and for the most part her expenses matched her planned outflow, with the exception of the following:

Expense	Higher / (Lower) than planned
Utilities	$900
Groceries	($200)
Recreation	$700
Clothing	$400

Which statement is true?

1. Resse had a negative forecasting error of $300.
2. Ressehad a negative forecasting error $200.
3. Resse had a positive forecasting error of $1,700.
4. Resse had a positive forecasting error of $500.