Introduction
In todays lesson, we will be discussing finance and differentiating between profit, loss, income and expenditure.
in order to function effectively in a society, you need to be able to manage your finances sensibly. it is important to plan ahead and decide how you will spend your income, so that you avoid running into debt, by drawing up a financial plan (budget) for yourself and your family. you can effectively guard against spending more than you can afford.
Task
watch the following videos and do the task
State weather the following income is fixed, variable or occasional.
1.1 Joan works as a cashier at a store. earning a salary of R 7 500
1.2 Steven works as second hand car dealer, he earns a basic salary of R3 000 per month and receives 10 percent commission for every car he sells.
1.3 Megan sometimes bakes muffins and sells them at school. she makes R2 profit per muffin.
state whether the following is fixed, variable, or occasional expenditure and whether it is high priority or low priority.
2.1 Jakes has to pay rent of R3 000 per month
2.2 Ashton pays R800for a new tyre for her car
2.3 Mondi pays R2 750 for a pair if jeans
Process
- read the notes
- familiarize yourself with the terminology and formulas
- do the task given
TERMINOLOGY 9income,expenditure,profit and loss)
- personal income - money coming into a household, i.e. money received
- this includes
- salaries, wages and commission - interest
- bursaries and loans - gifts and pocket money
- savings - inheritance
there are three types of income
- fixed income - a constant income coming into the household e.g. monthly salary, weekly wages, etc.
- variable income - an income that is not always the same e.g. completing a task, commission, interest on savings, etc.
- occasional income - an unreliable form of income e.g. overtime, funds from an inheritance etc.
PERSONAL EXPENDITURE - money being spent or going out of the household
this includes:
- living expenses
-accounts
-cellphone/telephone
-fees( school fees and bank fees)
- insurance
- savings
there are three types of expenditure
> fixed expenditure - an expense that is the same every week or month e.g. car repayment, monthly rent etc.
> variable expenditure - these are expenses that are expected every month, but are never constant , e.g. petrol, water etc.
> occasional expenditure - these are unexpected expenses tat do not occur every month e.g. burst geyser, broken down car etc.
personal expenses can also be divided into:
> high priority expenditure - expenses that have to be paid , e.g. food, rent, loan repayments, insurance, electricity etc.
> low priority expenditure - these are expenses you can do without i.e. luxuries e.g. movies, DSTV, decorations, etc
PROFIT AND LOSS
profit - if your income is more than your expenditure, you will make a profit ( i.e. you will have money left over at the end of the month /have a surplus)
. profit = income > expenditure
loss - if your income is less than your expenditure, you will make a loss (i.e. you will be in debt at the end of the month/ have a deficit)
loss = expenses> income
the general formula used to determine if a profit or loss was made is:
profit or loss = income - expenditure
- if the answer is positive, a profit was made
- if the answer is negative, a loss was made
Evaluation
| following instructions | 1 mark | |
| use of terminology | 2 marks | |
| total marks of the task | 12 marks |
memo
1.1 fixed
1.2 variable
1.3 occasional
2.1 fixed- high priority
2.2 occasional- high priority
2.3 occasional- low priority
Conclusion
after the lesson one will know more about income, expenditure, profit and loss
and will b able to do a budget.
Credits
Mathematics Literacy 3 in 1 answer series
youtube channels