The table below shows a budget for a rose production enterprise - NSC Agricultural Sciences - Question 3 - 2016 - Paper 2
Question 3
The table below shows a budget for a rose production enterprise. It shows estimates for the 2015/16 financial year.
| ITEM | ESTIMATED COSTS (IN RA... show full transcript
Worked Solution & Example Answer:The table below shows a budget for a rose production enterprise - NSC Agricultural Sciences - Question 3 - 2016 - Paper 2
Step 1
State the management principle addressed by the budget above.
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Answer
The management principle addressed by the budget is planning. This is evident as the budget outlines the expected costs and returns for the rose production enterprise.
Step 2
Calculate the profitability of this enterprise.
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Answer
To calculate profitability, we use the formula:
extProfit=extEstimatedreturns−extEstimatedcosts
Substituting the values:
extProfit=365000−81956=283044
Thus, the profitability of the enterprise is R283,044.
Step 3
Explain why the enterprise could or could not be recommended based on the calculations in Question 3.1.2.
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The enterprise could be recommended as it shows a substantial profit of R283,044. This indicates that the business is financially viable and is likely to be successful in the long run. However, if the costs are too high, or if profit margins are narrow, it may be necessary to reassess certain practices in order to sustain profitability.
Step 4
State ONE measure this farmer can put in place to make this enterprise more environmentally friendly.
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One measure the farmer can implement is to use organic farming systems. This approach reduces reliance on chemicals and promotes sustainable farming practices that can positively impact the environment.
