Quiz ( 5 min )
From the list , name which one are income and expense
1. telephone
2. gifts
3. wages
4. insurance
5. profits
6. personal taxes
7. salary
8. savings
9. commission
10. accounts
Question 1
Douglas wants to travel from Cape Town to Durban to visit his cousin. His parents said that they
can give him R500 towards the trip. He decides to draw up a budget to determine how much
money the trip will cost. His uncle has offered to give him a lift home so he only needs to budget
for the trip to Durban. He has R2 000 saved in his bank account. He wants to have some
spending money left over when he gets there.
He phones Rainbow Buses to find out how much it costs to travel from Cape Town to Durban.
They give him two options:
OPTION 1: Leave Saturday morning and travel straight to Durban. The trip costs
R1 200 and he will need to pay for 3 meals at R30 per meal.
OPTION 2: Leave Saturday morning and travel to Plettenberg Bay first. The trip.
costs only R400. He can then catch a bus on Sunday morning to Durban. This
bus trip will cost R500. If he does this he needs to find a place to stay on
Saturday night and budget for three extra meals (estimated at R30 each). He
estimates that a Backpackers’ Lodge would be the cheapest place to stay, at
R200 a night.
Income Expenses Running total of
money that he has
Money from parents
Savings
Accommodation
T Bus fare
Meals on bus.
a) Copy the above budget sheet and fill in the amounts for income and
expenses in the correct columns for Option 1 and Option 2.
b) Would you advise Dougias to take Option 1 or Option 2? Explain your
answer.
Question 2(22 Marks)
2.1To raise money for her upcoming soccer tour to Port Elizabeth, Lilitha has
decided to have a cake sale during breaks at her school. She buys
chocolate cakes at Spar for R50and cuts it into 8 pieces that she sells at
R10a slice. She also buys vanilla milk tarts for R30 each and cuts it into 8
slices that she sells forR6 a slice. The school charges Lilitha R150 a
month for renting a food stall.
2.1.1 Identify Lilitha's Fixed costs
2,1.2 In the monthof March, Lilitha bought and sold 30chocolate cakes, with
revision
Budgets, income and expenditure statements
A budget is a plan for using income to cover expenses in a specific period of time.
Table of some Income and Expenses
INCOME EXPENSES
Salary - monthly earnings from an employer Living expenses
Wages -weekly earnings from an employer Accounts
Commission - money earned for selling Telephone
* Profit - extra money gained on sales of goods Insurance
and service
Gifts Personal taxes
Financial assistance Loan repayments
-Rental income for a property. Savings
Salaries and wages
Business running expenses
Types of Income or Expenses:
• Fixed means it does not change with time.
• Variable means it changes over time, according to the situation.
• Occasional means it occurs from time to time.
There are several things you should aim for in your personal budget:
• It should list all of the items that are needed and should try to anticipate unforeseen
expenses.
• It should be realistic, so that you can stick to it.
• It should focus on the high priority items (essential items such as food and health care).
• An ideal budget should include a plan to save money for the future, or to pay off debts to
allow for savings in the following months.
