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The budget below shows the estimated financial aspects for an animal production enterprise for the 2016/2017 financial year - NSC Agricultural Management Practices - Question 3 - 2017 - Paper 1
Question 3
The budget below shows the estimated financial aspects for an animal production enterprise for the 2016/2017 financial year. | ESTIMATED EXPENDITURE | ESTIMATED INC... show full transcript
Worked Solution & Example Answer:The budget below shows the estimated financial aspects for an animal production enterprise for the 2016/2017 financial year - NSC Agricultural Management Practices - Question 3 - 2017 - Paper 1
Step 1
3.1.1 Name the management principle of the budget above.
Answer
The management principle that this budget addresses is Financial Planning. This entails making an assessment of revenue and costs to ensure that the enterprise operates within its financial means and efficiently allocates resources.
Step 2
Step 3
3.1.3 Calculate the possible profit/loss that this farmer could generate. Show ALL calculations.
Answer
To calculate profit/loss:
Profit/Loss = Total Income - Total Expenditure
Total Income = R477,500 Total Expenditure = R113,564
Profit/Loss = R477,500 - R113,564 = R363,936
Thus, the possible profit that the farmer could generate is R363,936.
Step 4
3.1.4 State TWO possible ways to increase the income of the enterprise.
Answer
- Find more markets for selling livestock and manure. Expanding market reach can increase sales.
- Add value to the products by processing them or by diversifying product offerings. This can attract higher prices and improve profitability.
Step 5
3.1.5 Identify the section of a business plan that is addressed in this scenario above.
Answer
The section of a business plan addressed in this scenario is Financial aspects or Budgeting. This focuses on the financial planning needed for successful operation and includes projected income, costs, and profit analysis.