ACCOUNTING PAPER GRADE 12 MEMORANDUM - AMENDED SENIOR CERTIFICATE EXAM PAST PAPERS AND MEMOS MAY/JUNE 2016

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ACCOUNTING
GRADE 12
SENIOR CERTIFICATE EXAM
MEMORANDUM
JUNE 2016

MARKING PRINCIPLES:

  1. Penalties for foreign items are applied only if the candidate is not losing marks elsewhere in the question for that item (no foreign item penalty for misplaced item). No double penalty applied.
  2. Penalties for placement or poor presentation (e.g. details) are applied only if the candidate is earning marks on the figures for that item.
  3. Full marks for correct answer. If the answer is incorrect, mark the workings provided.
  4. If a pre-adjustment figure is shown as a final figure, allocate the part-mark for the working for that figure (not the method mark for the answer).
  5. Unless otherwise indicated, the positive or negative effect of any figure must be considered to award the mark. If no + or – sign or bracket is provided, assume that the figure is positive.
  6. Where indicated, part-marks may be awarded to differentiate between differing qualities of answers from candidates.
  7. This memorandum is not for public distribution, as certain items might imply incorrect treatment. The adjustments made are due to nuances in certain questions.
  8. Where penalties are applied, the marks for that section of the question cannot be a final negative.
  9. Where method marks are awarded for operation, the marker must inspect the reasonableness of the answer before awarding the mark.
  10. In awarding method marks, ensure that candidates do not get full marks for any item that is incorrect at least in part.
  11. Be aware that some candidates provide valid alternatives beyond the memorandum.
  12. Codes: f = foreign item; p = placement/presentation.

MEMORANDUM

QUESTION 1
VALUE ADDED TAX
1.1                                             (3) 

1.1.1  True✓ 
1.1.2 False✓
 1.1.3 False✓

1.2.1                                        (12)

Calculate the VAT amount that is either payable to or receivable from SARS.
                                                                                                             62 300: three marks
44 800 ✓ + 69 300 ✓ – 7 000 ✓✓– 23 520 ✓ – 6 440 ✓– 4 900 ✓+ 840 ✓✓ – 2 352 ✓✓= 70 728 ☑
appropriate operations one part correct
Accept alternative arrangement for calculations (signs reversed; VAT control account, etc.)
Mark one line only – cannot mix signs (award highest mark) 
 VAT CALCULATION 
 VAT INPUT VAT OUTPUT 

23 520
6 440
4 900
7 000
2 352
70 728

114 940

44 800
69 300
840

 



114 940


1.2.2                                                                                                                                    [2]

What comment would you offer Nelson concerning this practice? State ONE point.
Any valid comment ✓✓(must mention legal/ethical issue) Award part marks for incomplete answer
Nelson must keep accurate records of VAT and make timeous submissions to SARS for the following reasons:

  • It is illegal/unethical business practice (fraud)/not prudent practice.
  • The business is an agent of SARS –money collected on behalf of SARS.
  • The business will be liable for penalties and fines. 

 

1.3 CREDOTIR'S RECONCILIATION
1.3.1                                [14]

  CREDITORS' LEDGER  CREDITORS' RECONCILIATION STATEMENT 
 Balance  110 170  111 600
a -11 000✓  
b  +5 000✓  
c   -28 800✓
d +1 650✓✓  
e -2 400✓✓  
f   -5 400✓✓
-2 700 1 mark -2 700 1 mark
g +3 300✓  
h   -13 800✓
     -1 380✓
     +44 400✓
     -15 180 two marks
+29 220 three marks
   106 620 ☑(both totals)  106 620

foreign items -1 per line if candidate earned a mark on that line

1.3.2                                                                 [4]

State TWO internal control measures that the business can use to prevent similar incidents from happening in future.
Any TWO relevant control measures ✓✓✓✓ No part marks to be awarded

  • Division of duties / rotate duties. (Pearl must not be the only person responsible for ordering and recording goods.)
  • Have special order forms to be signed by two people.
  • Check documents regularly against deliveries.
  • Do regular/random stock counts to verify stock records.

 

TOTAL MARKS 
 
 35


QUESTION 2
2.1 ABE ACCESSORIES
2.1.1                                               [15]

Factory Overhead Cost Note Presentation or incorrect / incomplete details -1 max -2
 
Consumable stores  ✓129 300
Salaries and wages: factory workers                                              one part correct
(97 500✓ + 3 800✓ + 380✓)
4 180 two marks 101 300: two marks 97 880: two marks		  ☑101 680
Sundry expenses: factory  ✓31 500

Water and electricity (50 000✓ + 4 000✓) x 60%✓
OR 30 000 one mark + 2 400: two marks                                      one part correct

  ☑32 400
Insurance (24 000✓ – 6 000✓) x 3/6 ✓                                          one part correct
                 (24 000 x 12/16) x 3/6		  ☑9 000
                                                                                    operation - one part correct  ☑303 880

 Foreign items: -1 max -2
2.1.2                                     [8]

 Production Cost Statement for the year ended 29 February 2016
Direct material   350 000
Direct labour cost                                                         balancing figure cannot be 0 or less ☑190 000
Prime cost/Direct cost                                                                        TCOP - FOHC  ☑540 000
 Factory overhead cost                                                                        see 2.1.1  ☑303 880
 Total cost of production                                                               operation bottom up  ☑843 880
 Work-in-process at beginning of year  ✓30 640
   874 520
 Work-in-process at end of year                                where no brackets inspect subtraction  ✓(9 320)
Cost of production of finished goods
                                                               10 500 x 82,40		  ✓✓865 200

 
2.2 NEW FASHION MANUFACTURERS
2.2.1                  [5], [3]

Gloria is concerned about the wastage of direct materials. Calculate the number of metres of fabric that was wasted.
Needed
4 500 x 2,5 = 11 250 metres ✓✓
Issued to factory:
11 500 metres ✓☑ (525 +12 450 – 1 475) one part correct
Wasted: 11 500 – 11 250 = 250 metres☑ one part correct 
Gloria feels that the wastage is significant. Provide a calculation to support her opinion.
250 ☑ /2,5 metres ✓ = 100 dresses ☑ one part correct
OR
250/11 500 = 2,2% of material sent to the factory
OR
100/4 500 = 2,2% of units soldOR250/ 11 250 = 2,2% of material needed


2.2.2            [4]

 Give TWO possible reasons for this wastage and, in EACH case, give advice to prevent this from happening in future.
  Reason (any TWO)✓✓ Advice ✓✓
 1  Unskilled workers; lack of efficiency Training of workers
 2  Poor quality of material Change supplier
Inspect (check) quality of material delivered
 OR.  Unavoidable wastage due to offcuts  Use offcuts to diversify
   Lack of supervision  Increase monitoring and supervision/ train supervisor


2.2.3            [4], [4]

 Calculate the break-even point for the year ended 29 February 2016.
     900 000 ✓   
(650✓ – 350✓)
300 two marks
3 000 units☑ one part correct

Explain why the business should be satisfied with the number of units made during the current financial year. State TWO points.
Any TWO of the following ✓✓✓✓         no figures necessary        mark in line with calculation above
Possible responses:

  • They are producing 1 500 units more than break-even.
  • They are producing 700 units more than last year
  • The break-even point is 200 less than last year.


2.2.4            [3], [4]

What effect will the import of the material have on the production cost of a dress? Provide a calculation to support your answer.
The production cost per dress will decrease ✓ by R75.
(2,5✓ x R30✓)

State TWO other consequences of importing the direct material.
Any TWO valid consequences ✓✓ ✓✓ No part marks to be awarded
Any possible response:

  • Local producer will lose business – more unemployment
  • Not easy to get stock on short notice / shipping delays
  • Change in exchange rate could affect the cost/profit without notice
  • Whether she should decrease the selling price of dresses or not
  • Lose clients – cannot advertise support for local products• Increase in import costs in future
  • Not easy to return poor quality materials

 

TOTAL MARKS 
 
50 

 

QUESTION 3
3.1   CONCEPTS         [4]

3.1.1   First in first out (FIFO)  ✓
3.1.2  Perpetual inventory system ✓
3.1.3  Specific identification method ✓
3.1.4  Periodic / Weighted-average method  ✓

 

3.2.1     [8]

Calculate the value of the closing stock on 29 February 2016 using the weighted-average method.
Unit costs:
= 320 770 ✓+ 1 392 380✓ – 22 650 ✓
           520 ✓ + 1 960 ✓ – 30 ✓
= 1 690 500                    3 marks
        2 450                      3 marks                              = 690               six marks
Stock value:
690 x 325 ✓ = R224 250 ☑ one part correct 

 

3.2.2     [6]

Calculate the following for the year ended 29 February 2016:
Cost of sales:
Opening stock                                                                                                                             320 770
Purchases                                                                                                                                1 347 500
Returns                                                                                                                                       (22 650)
Carriage on purchases                                                                                                                 44 880
                                                                                                                               See 3.2.1☑ 1 690 500
Closing stock                                                                                                          See 3.2.1☑ (224 250)
Cost of sales                                                                              Operation - one part correct☑ 1 466 250

Gross profit:
Sales (2 115 x 1 400)                                                                                                            ✓2 961 000
Cost of sales                                                                                                      See above ☑ (1 466 250)
Gross profit                                                                                Operation - one part correct☑ 1 494 750 


3.2.3            [5]

Calculate the average stock-holding period (in days) on 29 February 2016.
                                 272 510 three marks see 3.2.1
   ½ ✓(320 770 ✓+ 224 250☑) x 365
                  1 466 250☑ see 3.2.2
      = 67,8 days☑ operation one part correct

                         422,50 three marks; 845 two marks
     ½ (520 + 325) x 365
               2 115
= 72,9 days


3.2.4           [7]

Calculate the value of the closing stock by using the FIFO method.
(300 – 30)
270 ✓ x R755 ✓ = R203 850 ☑ one part correct
325 – 270 325 – figure above
55 ☑ x R740 ✓ = R40 700 ☑ one part correct
= R244 550 ☑ one part correct

 

3.3.1      [6]

 Identify ONE problem in Shop 1 and ONE problem in Shop 2. Quote figures. In EACH case, state ONE point of advice.
 Branch Problem ✓✓ Figure ✓✓ Advice ✓✓
 Shop 1
  • Stock-holding period, 180 days (too much money invested in stock)
  • Mark-up % of 90% (leads to low sales of 350 000)
    Do not accept advertising
  • Purchase stock in smaller quantities.
  • Decrease the mark-up % to increase sales.
 Shop 2
  • Returns are high: 15% of sales/R36 000
  • Advertising too low, R4 800 /2% of sales
  • Open for 5 days only
  • Low mark-up: 50%
  • Only 2 shop assistants
  • Sell correct/good quality items to customers to avoid returns/Review the returns policy.
  • Increase advertising to increase sales.
  • Open another day.
  • Increase mark-up % to increase sales
  • Employ more shop assistants

 

3.3.2             [4]

Explain TWO good decisions that Chad has made in respect of Shop 3.
Quote figures.
Explanation ✓✓               Figures ✓✓
Any TWO of the following

  • Good quality goods and/or good customer services resulted in fewer goods returned by customers – 19 000 (2% of sales)
  • Working 7 days a week resulted in good/high sales – R950 000
  • Advertised more – R47 500 (5% of sales)
  • Rent expense (R96 000) indicates shop is in a good area resulting in higher sales
  • Having 6 assistants to cope with large sales
  • Selling at the right price (60% mark-up) which led to high sales (R950 000)

 

TOTAL MARKS
 
40 

 

QUESTION 4
4.1   CONCEPTS       [4]

 4.1.1                        B                      ✓ 
 4.1.2  D                     ✓
 4.1.3  A                      ✓
 4.1.4  C                     ✓


4.2   PARADISE LIMITED
4.2.1 Ordinary Share  Capital            [6]    Presentation or incorrect / incomplete details -1 max -2

3 000 000  shares in issue at beginning  ✓6 000 000 
 1 000 000 shares issued during the financial year ✓5 000 000
 (200 000) shares repurchased
(average issue price: R2,75 ✓ per share) must be in brackets or subtracted
                                                                   if 200 000 or R2,75 is used		  ☑(550 000)
 3 800 000✓  shares in issue at end                       operation one part correct  ☑10 450 000

 

RETAINED INCOME                   [10]         Presentation or incorrect / incomplete details -1 max -2

 Balance at beginning of year 1 634 000 
 Funds used for shares repurchasedFunds used for shares repurchased(200 000 x R1,10) OR
770 000 – OSC amount above770 000 – OSC amount above
                                                                                                 Do not accept 770 000 as a final
                                                                                                                           -1 if no brackets		  ☑☑(220 000)
 Net profit after tax (3 800 000 ✓ – 1 064 000✓)                          one part correct  ☑2 736 000
 Ordinary share dividends                                                      must be in brackets or subtracted
                                                                                                           operation one part correct		  ☑(2 600 000)
 Interim  ✓840 000
 Final (4 000 000 x 44/100)                                                                              one part correct  ✓☑1 760 000
 Balance at end of year check                                                          operation one part correct  ☑1 550 000


4.2.2   BALANCE SHEET (STATEMENT OF FINANCIAL POSITION) ON 29 FEBRUARY 2016           [35] 

  ASSETS   
   NON-CURRENT ASSETS                                                                                                  TA - CA ☑11 918 400
   Fixed assets (12 278 400✓ – 890 000✓) ✓11 388 400
5           Fixed deposit: Sandton Bank                                                                                    balancing figure ☑530 000
   CURRENT ASSETS  3 538 600
   ✓Inventories                                                                                            balancing figure / CL x 0,5 ☑1 361 000
  ✓ Trade and other receivables
(356 000✓ – 17 800✓✓ + 6 800✓)
338 200 (3 marks)		 ✓345 000
   Cash and cash equivalents                                                                          CL x 0,8 – TOR (above) ☑☑1 832 600
 12 TOTAL ASSETS                                                                                       see total equity + liabilities ☑15 457 000
     
  EQUITY AND LIABILITIES  
  ORDINARY SHAREHOLDERS' EQUITY                                                                         operation ☑12 000 000
  Ordinary share capital                                                                                                   refer 4.2.1 ☑10 450 000
 3 Retained income                                                                                                               refer 4.2.1 ☑1 550 000
  NON-CURRENT LIABILITIES 735 000
 4 Loan from Director: J Jonas
(1 155 000✓ – 420 000 ✓✓)
(35 000 x 12)                                                                                                            one part correct		 ☑735 000
  CURRENT LIABILITIES                                                                                                       CA/1,3 ✓✓2 722 000
  Trade and other payables (478 000 ✓+ 12 000 ✓) ☑490 000 If balancing figure
  SARS: Income tax (1 064 000 ☑ – 1 012 000 ✓)                                    See Retained Income Note ☑52 000
  Current portion of loan                                                                                               see NCL above ☑420 000
  Shareholders for dividends                                                                                               refer 4.2.1 ☑1 760 000
 11 TOTAL EQUITY AND LIABILITIES                                                                                     operation ☑15 457 000

Foreign entries -1 max -2
Presentation/incorrect or incomplete details -1 max -2
All current liabilities may be shown as trade and other payables

4.3 AUDIT REPORT
4.3.1   [3]

What type of audit report did Topstar Ltd receive? Choose from the following: unqualified, qualified, disclaimer
Unqualified ✓
Reason: Any valid reason ✓✓ No part marks

  • The external auditor has not stated any irregularities in the audit report.
  • The audit report indicates that there were no issues that were found to be irregular. 


4.3.2   [3]

To whom is an audit report addressed?
Shareholders ✓
Reason: Any valid reason ✓✓ No part marks

  • The independent auditors are appointed by the shareholders at the AGM.
  • The shareholders are the owners of the company (contributed the capital).


4.3.3   [2] , [2]

Explain why the auditor mentioned IFRS in the audit report.
Any valid explanation ✓✓ Part marks can be awarded for partial answers

  • The financial statements can be compared to international standards.
  • The company operates in a global economy.
  • Shareholders may be from various parts of the world.

Explain why the auditor mentioned the Companies Act (Act 61 of 1973) in the audit report.
Any valid explanation ✓✓ Part marks can be awarded for partial answers

  • This assures the shareholders that the company is abiding by the law.
  • Standards are maintained.
  • This satisfies the shareholders that their investment is safe.
  • This creates investor confidence in the company.
  • The Companies Act dictates how the financial statements are to be presented

 

 TOTAL MARKS
 
65 

 

QUESTION 5
5.1 CONCEPTS      [4]

5.1.1   Non-current liability✓
 5.1.2  Shareholders' equity✓
 5.1.3  Current asset✓
 5.1.4  Financial asset✓


5.2 MAFUSA LTD
5.2.1          [16]

 (a) 2  3 640 000 – 2 002 000 = 1 638 000 ✓✓ No part marks 
 (b) 5                         750 000 x 15% x 4/12
750 000 ✓ – (491 750 ✓ + 37 500 ✓✓) = 220 750 ☑
one part correct
529 250 (3 marks)
 (c) 7

(Sold): 37 500 ☑ refer (b)
(New): 900 000 x 15% x 5/12 = 56 250 ✓✓

(Old): 2 890 000 ✓✓ x 15% = 433 500 ☑ one part correct
         (3 640 000 – 750 000)

Total: 527 250 ☑ one part correct
 (d) 2  3 640 000 + 900 000 – 750 000 = 3 790 000 ✓☑ one part correct


5.2.2          [5]  , [4]

Calculate the income tax paid.
                             1 279 000 – 895 300
8 700 ✓ + 383 700 ✓✓ – 9 900 ✓ = 382 500 ☑ one part correct
No part marks
Accept alternative arrangements (signs reversed and T account).
 Calculate the net changes in cash and cash equivalents.
   163 000  One method mark
54 750 - 92 000   (37 250)  Two marks
   125 750  One mark
71 000 (2 marks)
125 750 ✓ – 54 750 ✓+ 92 000 ✓ = 163 000 ☑ one part correct
125 750 + 37 250 (2 marks)= 163 000
(54 750 – 92 000)
Signs must be correct


5.2.3          [7]

CASH FLOW FROM FINANCING ACTIVITIES  50 000 ☑ One part correct
 Proceeds from shares issued  1 600 000✓✓
 Funds used to repurchase shares  (600 000✓✓
 Decrease in loan  (950 000)✓✓

-1 per line for incorrect use of brackets
Presentation or incorrect / incomplete details -1 max -2
5.2.4          [5]  , [3]

Calculate the return on average shareholders' equity.
                         895 300 ✓                 x 100 = 13,5% ☑ one part correct ; in % accept 13,45%
   ½ ✓(6 142 800 ✓ + 7 166 850)
6 654 825 3 marks
Calculate the net asset value.
one part correct, must indicate R or cents
7 166 850 ✓    x 100 = 774,8 ☑ OR 775 cents accept R7,75
   925 000 ✓         1


5.2.5          [8]

Comment on the overall liquidity position of the company. Quote THREE relevant financial indicators (with figures).
Any valid comment ✓✓ Part marks for partial answers can be awarded
Expected responses, e.g.:

  • The business is liquid/should have no problem in paying off its short-term debts.
  • Although the liquidity is good, the debtors are taking too long to pay.

Quoting of financial indicators ✓✓✓
Quoting of figures ✓✓✓

Any THREE valid indicators

  • The current ratio is 1,8 : 1 / increased from 1,7 : 1 to 1,8 : 1
  • The acid-test ratio is 0,9 : 1 / decreased from 1,3 : 1 to 0,9 : 1.
  • The stock-holding period is 52 days / decreased from 68 to 52 days.
  • The debtors' collection period is 47 days / increased from 30 to 47 days.
  • The creditors' payment period is 30 days / was constant on 30 days.


5.2.6          [4]  , [4] 

The directors decided to change the dividend pay-out policy in 2016. Provide calculations that indicate the policy change.

In 2015, the company paid 40 cents (DPS) of 112 cents (EPS) – 36%✓✓
In 2016, the company paid 105 cents (DPS) of 107 cent (EPS) – 98%✓✓
OR pay out increased by 62% four marks

For one mark each:
DPS changed from 40 to 105 cents / DPS increased by 65 cents
EPS changed from 112 to 107 cents / EPS decreased by 5 cents

For one mark each:
In 2015 they paid out a small portion (one third) of their earnings
In 2016 they paid out almost all (100%) their earnings

Explain the effect of this change of policy on the company. State TWO points.
Any TWO valid points ✓✓ ✓✓  Part marks for partial answers can be awarded
For two marks:

  • Retained income decreased and this could affect future growth (expansion) of the business.
  • It would influence the share price / increase demand for the shares
  • It could motivate shareholders to vote for the directors at the AGM
  • This decision has not significantly affected the company because they have still been able to expand and boost cash resourcesFor one mark:
  • Cash flow problem (one mark)


5.2.7          [6]

One of the directors feels that the company should pay back the loan as soon as possible. What are your views about this? Quote and explain TWO relevant financial indicators with figures.
Quoting of financial indicators ✓✓
Quoting of figures ✓✓
Explanation on gearing ✓✓ (DE and ROTCE) Part marks for partial answers

The debt/equity ratio is 0,3 : 1 / decreased from 0,4 : 1 to 0,3 : 1.
The business is lowly geared. They are not making much use of loans compared to own capital.

The ROTCE dropped from 13% in 2015 to 11% in 2016.
The interest rate on loans increased from 13% to 14%.

The company is receiving a return that is less than the interest rate (negatively geared). They are not using the loans effectively to generate a profit. It was a good decision to pay back the loan.
OR
The company must use the loan more effectively and efficiently to increase/improve the return earned. They should not have paid back the previous loan. 


5.2.8          [2]   , [2]

Explain why the shareholders are satisfied with the market price of the shares on the JSE (Quote figures/financial indicators.)
Explanation ✓
Figures ✓

  • Increased from 777 cents to 960 cents./ increased by 183 cents
  • The market price is higher than the NAV, 775 cents see 5.2.4
  • There is a demand for shares in this company
  • Investors are interested in buying shares. 

Explain why the shareholders are satisfied with the price at which the 75 000 shares were repurchased on 25 April 2016 (Quote figures/ financial indicators.)
Explanation ✓
Figures ✓
The company paid 800 cents per share although the market value at the end of the year was 960 cents. / The company paid 160 cents less than the market value

Do not accept comparison to NAV

 TOTAL MARKS
 70

  
QUESTION 6
6.1                          [12]

 (a) 2  Operating profit
46 500 – 350 = 46 150 ✓✓
 (b) 3 Cost of sales
198 000 ✓ x 100/160 ✓= 123 750 ☑ one part correct
OR
198 000 one mark x 62,5% one mark = 123 750 one mark
 (c) 3 Wages
1 800 ✓x 1,08 ✓= 1 944 ☑ one part correct
OR
1 800 one mark + 144 one mark = 1 944 one part correct
OR
1 800 one mark + 8% one mark = 1 944 one part correct
 (d) 4 Rent income
10 028✓ x 100 ✓ = R9 200 ☑ one part correct
                  109 ✓
OR
10 028 one mark - 828 two marks = R9 200 one part correct
Be alert for solve for x method


6.2.1                          [4]

Calculate the monthly salary due to the sales manager in June 2016.
(18 000 – 400)
         2
(8 800 ✓+ 400 ✓) x 107% ✓ = 9 844 ☑ one part correct
9 200 two marks 

  
6.2.2                          [4]

Calculate the total credit sales expected in July 2016.
221 760 two marks
198 000✓ x 1,12 ✓ x 80% ✓ = 177 408 ☑ one part correct
OR
If based on May actual figures:
240 240 two marks
195 000 one mark x (1,1 x 1,12) one mark x 80% one mark = 192 192 one part correct 

  
6.2.3                          [4]

Calculate the cost price of the new vehicle purchased on 1 May 2016.
(9 000 – 6 200)
2 800 ✓x 12 ✓ x 100/15 ✓ = 224 000 ☑ one part correct
33 600 two marks 

  
6.3                          [4]  

Comment on the control of telephone and water and electricity. What advice would you offer Susan? State ONE point.

Comment: ✓✓    No part marks No figures necessary

She has overspent / under-budgeted / not well controlled.(Budgeted R2 000, spent R4 880 / 2 880 more/144%)

Advice: ✓✓

  • She must monitor the use of telephone, water and electricity.
  • She must budget to take into account increase in tariffs or usage.
  • Keep/Check records regularly.
  • Investigate reasons for overspending


6.4                          [4]  

Susan wants to reduce the maintenance budget to R500 per month and then use this saving for staff training. What should she consider before making this change? State TWO points.

Any TWO valid points ✓✓ ✓✓  No part marks

  • Her actual maintenance expense is more than R500 (R2 000).
  • She will be under-budgeting.
  • Maintenance will be neglected – may cost more in the long run.
  • Replacement of old equipment sooner
  • Benefits of training to the business and will it impact on the use of machines.
  • It would be irresponsible to reduce an important expense by so much 


6.5                          [6]  , [2]      

Explain how Susan responded to this threat. State THREE points. Provide figures/calculations to support your answer.
Any THREE valid points ✓✓✓
Figures ✓✓✓

  • Bought a new vehicle to do deliveries – vehicle expenses incurred (R4 000) and depreciation increased
  • Reduced mark-up from 60% to 30% (45 000/150 000) to increase sales
  • Advertised more – increased from 2 400 to 9 600 or by R7 200 (3 times) 

Explain whether Susan's response was successful or not. Provide figures.

ONE valid point with figures ✓✓

Answer for two marks:

  • Susan's efforts were not successful because even though sales increased gross profit decreased (R45 000)
    OR
  • Susan's efforts were not successful because even though sales increased expenses such as cost of sales (R150 000) / Vehicle expenses (R4 000), etc. increased significantly

Answer for one mark:

  • Sales exceed budget by R15 000 

 

 TOTAL MARKS
 
 40

                                                                                                                                                                                                                      TOTAL:300

Last modified on Tuesday, 15 June 2021 08:22
Published in Grade 12 Amended Senior Certificate Exam Past Papers and Memos 2016

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