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ECD NQF 4 - Module 3 US7468 Use mathematics to investigate
- Course
- ECD NQF 4 (US7468)
- Institution
- University Of South Africa (Unisa)
This is the first unit of Module 3. It is my personal work and is complete.
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Unit Standard number 7468Use mathematics to investigate and monitor the financial aspects of personal. Business, national and
international issues
Question 1 (Page 14)
Define a budget.
A budget is a financial or quantitative statement of actions prepared in advanced with the aim to
meet certain objectives of an individual or institution for a given period of time; subject to prior
policies, principles, and/or agreed upon strategies.
Question 2 (Page 14)
What are the steps to be followed for company budgetary control?
A company must:
1. Define their objectives
2. Allocate responsibilities to achieve the objectives
3. Draw up a statement of policies and strategies necessary to achieve the objectives
4. Prepare their budget, calculating any likely results, as per forecast
5. Get the budget approved
6. Implement the policies and strategies
7. Measure actual progress against what the budget states
8. Adapt the policies to reflect the actual conditions and new circumstances as observed.
Question 3 (Page 14)
Why is it advisable to start with a sales- then a production- and then a capital expenditure forecast in
the budgeting process?
• Forecast of Sales come first, because they guide the necessary performance of a company. For
instance, a company cannot have production lower than sales because it will not be operating at
their optimal revenue. On the other hand, a company cannot produce more than Sales; lest it
spends on storage, refurbishing or transportation of the surplus produce. In certain cases, the
company’s surplus production may go to waste.
Only after a company has done their forecast of sales, can they plan on production.
• After sales and production have been forecasted, a company needs to think first of the
expenditures on means of production. Before a company spends of anything, it must first spend
on itself, i.e. capital. We start with capital before departmental forecasts because capital is what
informs the company of how many departments it will need in the first place.
Essentially, a company needs to know sales in order to size their production. They then need
production in order to size their required capital
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