A budget is a plan of future income and expenses of a business as shown below. Expected income and expenditure information: 2 kg seed @ R400,00 per kg 850 kg fertilisers @ R80,00 per 50 kg bag Transport for 17 bags of fertiliser @ R5,00 per 50 kg bag (only one trip) Wages for 2 workers @ R400,00 per person per week for planting 1 500 product packaging material @ R1,50 each Transport to market @ R300,00 per trip (6 trips) Sales of the 1 500 boxes of the product @ R15,00 a box. Complete the table below in the ANSWER BOOK. Use the data above to draw up a budget for your crop enterprise. EXPECTED EXPENDITURE ITEM QUANTITY PRICE PER UNIT (R) TOTAL PRICE (R) Total expenses EXPECTED INCOME ITEM QUANTITY PRICE PER UNIT (R) TOTAL PRICE (R) Total income Expected profit

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A budget is a plan of future income and expenses of a business as shown below - NSC Agricultural Management Practices - Question 4 - 2021 - Paper 1

Question 4

A budget is a plan of future income and expenses of a business as shown below. Expected income and expenditure information: 2 kg seed @ R400,00 per kg 850 kg ferti... show full transcript

Worked Solution & Example Answer:A budget is a plan of future income and expenses of a business as shown below - NSC Agricultural Management Practices - Question 4 - 2021 - Paper 1

Step 1

EXPECTED EXPENDITURE

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Answer

To calculate the expected expenditure, we need to sum the costs of each input:

Seed:
- Quantity: 2 kg
- Price: R400,00/kg
- Total Price: $2 imes 400 = R800,00$
Fertilizer:
- Quantity: 850 kg
- Price: R80,00 per 50 kg
- Total Price: $850 imes (80 / 50) = R1,360.00$
Transport for Fertilizer:
- Quantity: 17 bags
- Price: R5,00 per 50 kg bag
- Total Price: $17 imes 5 = R85.00$ (only one trip)
Wages:
- Quantity: 2 workers
- Price: R400,00 per person per week
- Total Price: $2 imes 400 = R800.00$
Packaging Material:
- Quantity: 1,500
- Price: R1,50 each
- Total Price: $1500 imes 1.50 = R2,250.00$
Transport to Market:
- Quantity: 6 trips
- Price: R300,00 per trip
- Total Price: $6 imes 300 = R1,800.00$

Total Expenses:

$800 + 1,360 + 85 + 800 + 2,250 + 1,800 = R7,095.00$

Step 2

EXPECTED INCOME

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Answer

To calculate the expected income, we focus on the sales of the product:

Product Sales:
- Quantity: 1,500 boxes
- Price: R15,00 per box
- Total Price: $1,500 imes 15 = R22,500.00$

Total Income:

$22,500.00$

Step 3

EXPECTED PROFIT

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Answer

To find the expected profit, we subtract the total expenses from the total income:
Expected Profit:

$22,500.00 - 7,095.00 = R15,405.00$

Step 4

4.2.1 Explain the following terms that are used in the Balance Sheet. (a) Fixed assets

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Fixed assets are the long-term tangible assets that a business owns and uses in its operation to generate revenue. These assets are not intended for resale and typically include property, machinery, and equipment.

Step 5

(b) Depreciation

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Depreciation refers to the reduction in the value of an asset over time due to factors such as wear and tear, age, or obsolescence. It is an accounting process used to allocate the cost of an asset over its useful life.

Step 6

(c) Creditor

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Answer

A creditor is an individual or organization that has provided goods or services to a business on credit. In other words, creditors are entities to whom the business owes money.

Step 7

4.2.2 Describe the importance of analysing the Income Statement as a financial record.

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Analyzing the Income Statement is crucial as it helps a business determine its profitability, assess financial performance, and make strategic decisions. It allows management to identify trends, manage operational costs, and evaluate revenue streams, ensuring the business remains financially healthy.

Step 8

4.3 Give THREE reasons why consumers are interested in buying processed products.

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Consumers are often interested in processed products for several reasons:

Longer Shelf Life: Processed products typically have a longer shelf life, allowing for easier storage and transportation.
Convenience: They often require less preparation and are easier to use compared to fresh products.
Availability: Processed products can be accessible year-round, regardless of seasonal fluctuations.

Step 9

4.4 Name THREE important reasons for the grading of agricultural products.

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Grading of agricultural products is essential for multiple reasons:

Standardization: It ensures that products meet specific quality standards for consumer recognition and acceptance.
Market Pricing: Proper grading allows farmers to obtain better prices based on the quality of their products.
Consumer Confidence: Well-graded products contribute to consumer trust in purchasing decisions.

A budget is a plan of future income and expenses of a business as shown below - NSC Agricultural Management Practices - Question 4 - 2021 - Paper 1

Worked Solution & Example Answer:A budget is a plan of future income and expenses of a business as shown below - NSC Agricultural Management Practices - Question 4 - 2021 - Paper 1

EXPECTED EXPENDITURE

EXPECTED INCOME

EXPECTED PROFIT

4.2.1 Explain the following terms that are used in the Balance Sheet. (a) Fixed assets

(b) Depreciation

(c) Creditor

4.2.2 Describe the importance of analysing the Income Statement as a financial record.

4.3 Give THREE reasons why consumers are interested in buying processed products.

4.4 Name THREE important reasons for the grading of agricultural products.

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