Shelpstone Traders sell household appliances for cash and on credit - NSC Accounting - Question 3 - 2021 - Paper 2

Referencing the Cash Budget, we make the following evaluations:

1. For part (a): Rent income in December 2021 is given by the formula: $\text{Rent Income} = \text{Full Value} \times \frac{100}{100}$ That is: $20056 \times 100 = 20056$

2. For part (b), the payment to creditors involves straightforward calculation: $456000 - 91600 = 364800$

3. Lastly, for (c), we compute the cleaning payment again as per earlier determination demonstrating mathematical consistency.

1. Staff Reduction Justification: Brian may explain that reducing staff by one will decrease overall operational costs. For instance, if total sales for November were R 798,000, the adjustments would still allow other staff to manage sales effectively.

2. Performance Improvement: Furthermore, Brian can indicate that with better training and focus on efficiency, the existing staff can handle the volume previously managed by the now-reduced team.

The repair staff feels overwhelmed because they are overloaded with work, leading to a lack of balance between anticipated and actual workload. For example, figures indicate that they receive around 66 calls when only 70 were expected, indicating pressure to perform above capacity. More specifically, each repair staff's expected workload is surpassed due to inadequate hires.

1. Training Program Implementation: Train each staff member to do repairs, thereby spreading the workload more effectively and ensuring that no single person is overwhelmingly burdened.

2. Hire Additional Staff: Consider hiring temporary or casual workers to alleviate pressure during high-demand periods.

In examining the cash and credit sales figures for November 2021, sales figures indicate that cash sales were 73% of expectations while credit sales were 77%. This suggests that credit customers are spending less than anticipated and may be a cause for concern. Brian should focus on this decline to address potential cash flow issues.

Regarding fuel control, budget assessments indicate inefficiencies as actual fuel expenses exceed budgeted figures by R 900, translating to budgeted expenses of 2.6% of total sales. Additionally, consumables for repairs remain closely monitored, confirming that stores incurred costs lesser than expected, indicating good management.