VHEMBE EAST DISTRICT
VUVUMUTSHENA SECONDARY SCHOOL
MATHEMATICAL
LITERACY GRADE 10-12
STUDY NOTES
INCOME, EXPENDITURE,
PROFIT/ LOSS AND BUDGET
2025
INCOME, EXPENDITURE, PROFIT/LOSS AND BUDGET
An INCOME AND EXPENDITURE STATEMENT is a list of actual income and
expenditure.
A BUDGET is a plan for using income to cover expenses. It is a list of expected (estimated)
income and expenditure.
INCOME
• Salary – monthly earnings from an employer
• Wages – weekly earnings from an employer
• Commission – money earned for selling
• Profit – extra money gained on sales of goods and services
• Gifts
• Financial assistance
• Rental income for a property
EXPENSES
• Living expenses
• Accounts
• Telephone
• Insurance
• Personal taxes
• Loan repayments
• Savings
• Salaries and wages
• Business running expenses
Types of Income or Expenses:
• Fixed means it does not change with time. Constant rand value per month.
• Variable means it changes over time, according to the situation. Rand value differs every
month.
• Occasional means it occurs from time to time. Not always received or paid.
Profit and Loss
• Profit is when your income is a bigger than your expenditure i.e. income >expenses.
• ⸫ You will have money left over at the end of the month/ a surplus.
• Loss is when your expenses are bigger than your income i.e.
expenses > income.
⸫ you will not have enough money to cover your bills / you will be in debt/ have a
deficit of money.
• The general formula used to determine if a profit or loss was made is:
PROFIT/LOSS = Income − Expenditure
➢ If the answer is positive, a profit was made.
➢ If the answer is negative, a loss was made.
• When we want to compare the profit and income, we calculate the profit margin;
as this provides a means for comparing business performance over different time
intervals:
profit
Profit Margin 100%
income
• To compare the relationship between the profit and cost price, we calculate the
percentage profit: profit
% Profit 100%
cost price
QUESTION 1
Dean's mother, Ella, started her own instant photography business by taking photographs on
the beach. She has a camera, but needs to buy a printer, photo paper and ink cartridges for
printing.
Canon Selphy CP100 photo printer Canon photo paper + 3 print cartridges
Price = R1 125
[Adapted from www.takealot.com and www.amazon.com]
TABLE 1 shows Ella's income and expenses for producing and selling up to 200
photographs.
TABLE 1: INCOME AND EXPENSES OF ELLA'S PHOTOGRAPHY
BUSINESS
NUMBER OF
PHOTOGRAPHS 0 25 50 80 100 125 150 170 200
Income (rand) 0 500 1 000 1 600 2 000 2 500 3 000 … 4 000
Expenses (rand) 1 125 1 250 1 375 A 1 625 1 750 1 875 1 975 2 125
[Adapted from www.computermania.co.za]
Use TABLE 1 above to answer the questions that follow.
1.1 Determine the selling price of ONE photograph. (2)
1.2 Write down the formula that could be used to calculate the total income received. (2)
1.3 The total expenses can be calculated using the following formula:
Expenses (in rand) = 1 125 + number of photographs × 5
(a) Write down the variable cost for taking ONE photograph. (2)
(b) Calculate missing value A. (3)
1.4 ANNEXURE A shows two graphs, X and Y, which can be used to represent the business.
Use ANNEXURE A to answer the following questions.
(a) Give a suitable heading for the graphs that were drawn. (2)
(b) State which graph (X or Y) represents the income received by the business. (2)
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ANNEXURE A
QUESTION 1.4
4 500
4 000 X
3 500
3 000
2 500
Y
2 000
1 500
1 000
500
0
50 100 150 200 0
Number of photographs
QUESTION 2
Ulwazi and Ami are engaged and plan to get married. They are planning their wedding
reception. They plan to invite 67 couples and 16 single persons as the only guests to the
reception.
The table below is an extract from the budget for the wedding reception.
TABLE 2: EXTRACT FROM THE BUDGET FOR THE
WEDDING RECEPTION
Reception costs
Venue R22 100
Catering R34 200
Drinks R7 650
Wedding cake R2 500
Subtotal R66 450
Other expenses
Flowers and decorations …
… …
Subtotal …
TOTAL BUDGETED AMOUNT R125 000
[www.coinmill.com. Accessed on 3 November 2014.]
Use TABLE 2 above to answer the questions that follow.
2.1 Determine the total number of guests they plan to invite to their wedding reception. (2)
2.2 Show how the catering cost was determined if the cost per person is R225,00. (2)
2.3 Express the total reception cost as a percentage of the total budgeted amount. (2)
2.4 Calculate the cost of the flowers and decorations if it is 1,8% of the total budgeted
amount. (2)
2.5 Identify ONE expense, other than flowers and décor that could be included in the
budget and briefly explain this expense. (2)
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QUESTION 3 - NATIONAL BUDGET
During the last budget speech on 28 February 2017, Minister Pravin Gordon released the
National Budget for South Africa for the 2017/2018 budget year. Study TABLE 2 and answer
the questions that follow.
TABLE 3: GOVERNMENT EXPENDITURE BY FUNCTION
R (in million) 2016/2017 2017/2018 2018/2019 2019/2020
Estimate Estimate Estimate Estimate
Basic Education 226 643 242 968 261 292 280 139
Health 170 888 187 483 201 377 217 131
Defence, Public Order and 190 036 198 702 210 814 224 956
Safety
Post-school Education and 68 952 77 550 80 856 89 839
Training
Economic Affairs 201 658 215 047 227 995 244 003
Municipal Infrastructures 179 834 195 751 210 170 226 402
Total General Public Services 69 977 70 695 72 462 75 616
consisting of:
Executive and legislative
organs 12 976 14 340 15 202 16 089
General public
administration 45 185 43 943 44 584 46 775
External affairs and foreign
aid 11 816 12 412 12 677 12 752
Agriculture, Land Reform 25 998 26 534 27 923 29 826
Social Protection 164 936 180 046 193 548 209 088
Allocated by function 1 298 923 1 394 776 1 486 437 1 597 001
[Source: www.statssa.gov.za]
Use TABLE 3 above to answer the questions that follow.
3.1 Which function was allocated the most money in this budget? (2)
3.2 Write down the ratio of funds allocated for Basic education to funds allocated for
Post School Education and Training for 2016/2017 in the form 1 : …. (2)
3.3 Show how the projected expenditure of R70 695 million for General Public
Services was calculated for the 2017/2018 budget year. (2)
3.4 Calculate the percentage of the expenditures that was allocated to Economic
Affairs in the 2016/2017 budget year. (3)
3.5 Calculate the increase (in Rand) for the estimated expenditures of Basic
Education from the 2017/2018 budget year to the 2019/2020 budget year. (3) [12]
QUESTION 4
Tebogo decided to remove garden waste
on Saturdays.
She hires a bakkie and a trailer at R400 a
day. She asked her friend James to help
her. She pays James R300 per day.
Tebogo receives R20 per drum she
removes.
PHOTO 1: Hired trailer and bakkie
Use the above information and answer the questions that follow:
4.1 Calculate Tebogo's daily fixed expenses. (2)
4.2 Tebogo has removed 80 drums and her variable expenses are R240.
Calculate the variable expenses per drum. (2)
4.3 TABLE 4 below shows the ratio between the number of drums (with
waste) and the total expenses.
TABLE 4: EXPENSES OF REMOVAL OF WASTE DRUMS
Number of drums (n) 0 10 20 30 40 50 80
Expenses (C) in Rand 700 730 760 A 820 850 940
4.3.1 Write down a formula in the form Expenses (C) = .............. to determine
the expenses (C) if a number of drums (n) are removed. (2)
4.3.2 Hence determine the value of A. (2)
4.3.3 Determine the number of drums that were removed for R1 000. (2)
4.4 Tebogo receives R20 to remove 1 drum. On a certain day, she received
R1 600. Calculate the number of drums she removed on that specific day. (2)
4.5 The graph of Tebogo's expenses is drawn on the ANSWER SHEET provided. Now
draw the graph of Tebogo's income on the same set of axes and name the axes and
the graph appropriately. (6)
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