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

7. Sales of Product: For 1 500 boxes at R15,00 each,
   • Total Price: $1 500 ext{ boxes} imes R15,00 = R22 500,00$

Total Income:

• $R22 500,00$

Expected Profit:

• Total Profit: $Total Income - Total Expenditure = R22 500,00 - R7 094,00 = R15 406,00$

Fixed assets are tangible assets that are purchased for long-term use in the business and are not intended to be quickly converted into cash.

Depreciation refers to the reduction in the value of an asset over time due to wear and tear or age.

A creditor is a person or company to whom the farm owes money.

Analysing the Income Statement is crucial for:

1. Determining if the business is operating profitably or at a loss.
2. Identifying areas for improvement if the business runs at a loss.
3. Understanding profit levels to strategize for increased profitability.
4. Comparing budgeted figures with actual performance to make necessary adjustments.

1. Processed products have a longer shelf life compared to fresh produce.
2. They are easier to handle and transport.
3. Processed products are more convenient and can be prepared quickly.

1. To standardize quality and ensure consistency.
2. To achieve better market prices and consumer recognition.
3. To simplify the decision-making process for consumers.

Processing fruit juice concentrate extends the original product's shelf life, adds value, and minimizes the chance of product damage, ultimately leading to higher profit margins.

Profit per bottle is calculated as:

• Profit = Selling Price - Break-even Point = R116,00 - R82,00 = R34,00.

The value in South African Rand (ZAR) can be calculated using the exchange rate:

• If $R16 / €1$, then $€12 imes R16 = R192,00$.

A weaker Rand means that the income earned in foreign currency will be higher, which could lead to increased profit potential. Conversely, if the exchange rate strengthens, the profit margins could decrease due to lower returns when converting earnings back to local currency.

Harvesting is the process whereby the produced products are removed and collected from the field or animal.

1. It is relatively cheap as it requires minimal equipment.
2. Hand harvesting requires less maintenance compared to machines.
3. Selective harvesting enables choosing ripe produce only.

1. For selling in markets.
2. As food for animals or people.
3. For ingredients in products like medicines or cosmetics.
4. For processing into manufactured products.

1. Packaging must be cost-effective to reduce overall production expenses.
2. The type of material must protect the product during transport.
3. Packaging should provide information to consumers and should be easy to recognize.

1. Presence of microorganisms in the food can lead to spoilage.
2. Action of enzymes breaking down food quality.
3. Damage caused by insects or rodents.
4. Wrong handling practices that create an environment for spoilage.