Financial Management Supplementary NCV Level 4 — Document P1
March 2018 — NCV Level 4 — Financial Management Supplementary
NCV Level 4
2018
NCV Business
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Q1— Section header —
1.1Complete the following sentences by using the words in the list bel ow. Write only the missing word/ s next to the question number (1.1.1
1.1.5acid test; reliable; capital; sole trader; budget diary; vehicles profitability ratio; close corporation
1.1.5s a useful tool to record activities for future planning. under the equity section on the balance sheet. s tax in his/ her personal capacity. n be used to assess a business' ability to meet its short term obligations.
1.2.5incurred by a busin ess for a defined period before signing any legal agreements. The name of a private company ends with the words ... (Ltd\
1.3Calculate
1.3.1The taxable income of a small b usiness if the gross income i R125 000, the direct costs R19 605 and the indirect costs R22
1.3.2The marginal income per unit if the total variable cost is R1 225 and the total fixed cost R1 500 . T he
1.3.3The breakeven quantity
Q1— Section header —
1.3.4he break even value (in rand \based on the break even quantity calculated
Q1— Section header —
1.3.5The UIF amount if a worker earned normal wag es of R3 000 and R500 overtime. UIF is calculated at 1% of the normal wages (2
1.4Name the form that an individual taxpayer will complete when he/she submits tax return to SARS
1.5.1 Calculate the budgeted labour hours needed for production in: (i\015 (ii\ 2016 (2 2\
1.5.2 Calculate the budgeted labour cost for (i\015 (ii\ 2016 (2
1.5.3 Briefly e xplain the difference between direct and indirect cost (2\
1.5Give ONE example EACH of direct PRODUCTION cost and an indirect PRODUCTION
1.6State whether the following expenses are fixed or variable: 1.
6.1Petrol 1.
6.2Stationery 1.
6.3Rental pai 1.
6.4Wages for casual worker 1.
6.540
Q2— Section header —
2.1Which form of business ownership is Ledule Design Furnishers (1\
2.2Ledule is considering regist ering her business as a private company.
2.2.1Briefly explain the term limited liability (2\
2.2Briefly explain to Ledule how business tax is paid in (i\
2.3
2.4Afri Bank is prepared to grant Ledule a loan of R50 000 payable over 5 years at an interest rate of 11% pa
2.5
2.6Ledule allows her regular customers to purchase on credit. She allows them credit terms of 60 days. Give THREE measures that she can implement
2.7Give the accounting term when debtors who do not pay and their debt must be written off. (1\
2.8
2.9
2.10Name the financial statement that indicates the financial performance of a business [40]40
Q3— Section header —
3.1Define the term budget. (2\
3.2Study the income s tatement of Ledule Design Furnishers below and answer the questions that follow: Item October 2016
3.2.1Calculate the cost of sales variance for October 2016. State whether the variance is favourable or unfavourable. (3\ (3011014\ NC1280 (E\
3.2.2
3.2.3 The records of Ledule Design Furnishers revealed that the budgeted electricity amount is less than the actual amount. Give ONE tip to Ledule on how she can reduce the electricity cost. (2\
3.2.4There is no variance in salaries and wages. Give ONE possible reason for this. (2\
3.2.5Name TWO situations in which it would be appropriate to adjust the budget of a business. (2\
3.3How often should a business like Ledule Design Furnishers prepare their financial statements? (1\
3.4Ledule wants to purchase a specialised wood design machine for her business. The machine costs R28 000 and has an expected life span of five years. The estimated rate of return is 11%. The following information is available regarding the machine:
3.4.1Calculate the net present value of the machine. Show ALL calculations and round off answer to TWO dec
3.4.2Should Ledule buy the wood machine? Give a reason for your answer. (2\
3.5List any TWO benefits of periodic financial reporting. (2
3.6rief ly describe the payback method as an investment appraisal technique. (2\ (3011014\
3.7Indicate whether the following statements are TRUE or FALSE. rite only 'true' or 'false' next to the question number
3.710
3.7.1The payback period method considers the time value of money.
3.7.2The internal rate of re turn is used to evaluate the viability of investing in a project or fixed asset
3.7.3The purpose of the OID fund is to provide for employees when they become too old to work
3.7.4In order for Ledule to qualify for bank overdraft s he must not have any other bank accounts
3.7.5Creditors are individuals who buy goods on credit from a business.
3.7.6The balance sheet shows the financial position of a busines s at a specific point in time.
3.7.7Output VAT is an income for a business while input VAT is an expense.
3.7.8The break even quantity indicates the rand value of the sales that a business must achieve in order to breakeven.
3.7.9When a business breaks even, its income is greater than its expenses.
3.7.10
3.8Suggest ONE method that Ledule can use to reduce costs in her business.
Q4— Section header —
4.1The following information was extracted from the records of Ledule Design Furnishers: Balance S heet of Ledule Design Furnishers on 28 February 2017 2016 (R\ 20
4.1.1Calculate Ledule Design Furnishers 2017. (4
4.1.2Calculate the current ratio for 2016. Round off your answer to 2 decimals.
4.1.3The current ratio for 2017 is 2,29 Compare the ratio to that of 2016 and comment on it. (2\
4.1.4debt ratio for: 2016 was 2,37 : 1 2017 is 3,1 Compare the ratio for both the years and comment on it.
4.2
4.3Income s tate ment of Duncan M anufacturers for the year ended 28 February 2017 201
4.3.1Calculate the c ost to income ratio for 2016. (4\
4.3.2Calculate the net profit percentage on sa les for 2016 and 2017. (5\
4.3.3Give ONE possible reason for the change in the net profit ratio over the two years
Q4— Section header —
4.3.4Calculate the turnover performance ratio for 2017. (5 4. Define the te and give ONE example of it
5.1.1Define the term capital allowance (2\
5.1.2
5.2Ledule Design Furnishers bought wood from Barileng Wood Suppliers for R10 888 including VAT. Furnitur e is manufactured from this wood and sold to Railway Furnishers for R27 500 excluding VAT. Calculate the following for
5.2.1nput and output VAT. (4\
5.2.2he amount payable or refundable to SARS. Clearly indicate wh ether the amount is payable or refundable. (2 (3011014\
5.3Indicate whether the following expenses of Ledule Design Furnis hers are tax deductible or not. Give ONE reason for each answer.
5.3.1Ledule, the owner, paid for a fa mily dinner to celebrate her mother 's retirement
5.3.2Ledule Design Furnishers purchased a manufacturing machine to be used in the business.
5.3.3
5.4
5.5Study the tax table below and answer the questions Tax rates for individuals Taxable income Rates of tax R0 R122 000
5.5.1Boikanyo is 66 years old and has a taxable income of R220 000 for the year of assessment. Calculate his tax payable. (7
5.5.2Keatlegile is 28 years old and has a taxable income of R115 000 per annum. Calculate her tax payable. (5
5.6Name TWO budgeting techniques that a business can use (2\
5.7Name ONE consequence of submitting a tax r eturn late. (2\
5.8Give TWO reasons why it is important for Ledule to prepare a business plan. (2\ [40] TOTAL SECTION B: GRAND TOTAL: 160 20040
Topics Identified
5
Business EnvironmentsForms of OwnershipBusiness FunctionsLeadershipBusiness Plan
Mark Allocation
Total200 marks
Sections40 + 40 + 40 + 40 + 40 = 200 marks
Paper information
TitleDocument
SubjectFinancial Management Supplementary
LevelNCV Level 4
Document typeQuestion paper
Year2018
MonthMarch
Pages11
Downloads4
Examination context
Decade2010s
Years ago8y
SeasonAutumn (SH)
Start dayThursday
Exam periodMarch 2018
Days since exam3,147
About Financial Management Supplementary examination preparation
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