QUESTION TWO

$[30]$

$2\mathrm{.}1$ Prepare the incremental budget for the $2024$ financial year for the public entity operating in the Northern Cape based on the following inputs received from the various directorates:

$(20)$

$\backslash$table$[[$Item$,$Budget,Actual$],[2023,2023],[$Interest on cash and investments,$42000,46500],[$Sale of goods,$189000,186000],[$Sundry income,$86000,83000],[$Inspection fees,$1200000,968000],[$Total income,$1517000,1283500],[$Cost of sales,$-80000,-76000],[$Advertising and marketing,$-32000,-29500],[$Equipment rental,$-30000,-31000],[$Municipal charges,$-66000,-71500],[$Office rental,$-120000,-123000],[$Printing and stationery,$-12000,-11500],[$Salaries and staff cost,$-1177000,-1298000],[$Total expenditure,$-1517000,-1640500],[$Net surplus$/($deficit$),0,-357000]]$

$($a$)$ Due to the significant increases in the municipal charges, the public entity expects a $5\%$ increase on the actual spending incurred during the $2023$ financial year, with the office rental also expected to increase at the same rate on the actual expenses incurred.

$($b$)$ Printing and stationery are expected to increase with $5\%$ on the approved budget vote if additional cost$-$savings measures can be maintained by the public entity.

$($c$)$ The Salaries and wages budget is expected to increase with R$55000.$

$($d$)$ The cost of sales for $2024$ will be calculated as a $5\%$ increase on the approved $2023$ budget.

$($e$)$ Advertising and marketing commitments entered for the $2024$ financial year were calculated at R$34750.$