Calculate the net profits of A and B. Which of A and B is more profitable?

Here are the answers to the questions from the image: QUESTION 5: a) Calculate the net profits of A and B. Which of A and B is more profitable? Step 1: Calculate the Cost of Goods Sold (COGS) for each product. The formula for COGS is: Purchases - Closing Stock. For Books (A): COGS (A) = 50,000 FCFA - 10,000 FCFA = 40,000 FCFA For Didactics (B): COGS (B) = 50,000 FCFA - 20,000 FCFA = 30,000 FCFA Step 2: Calculate the Gross Profit for each product. The formula for Gross Profit is: Sales - COGS. For Books (A): Gross Profit (A) = 200,000 FCFA - 40,000 FCFA = 160,000 FCFA For Didactics (B): Gross Profit (B) = 250,000 FCFA - 30,000 FCFA = 220,000 FCFA Step 3: Calculate the Net Profit for each product. The formula for Net Profit is: Gross Profit - Selling Expenses. For Books (A): Net Profit (A) = 160,000 FCFA - 10,000 FCFA = 150,000 FCFA For Didactics (B): Net Profit (B) = 220,000 FCFA - 20,000 FCFA = 200,000 FCFA Step 4: Compare the profitability. Net Profit (A) = 150,000 FCFA Net Profit (B) = 200,000 FCFA Since 200,000 FCFA > 150,000 FCFA, Didactics (B) is more profitable. Net Profit for Books (A): 150,000 FCFA Net Profit for Didactics (B): 200,000 FCFA Didactics (B) is more profitable. b) Give BENCO three methods that can be used to increase the level of sales of the shop. 1. Promotional Campaigns: BENCO can run special offers, discounts, or loyalty programs to attract more customers and encourage repeat purchases. 2. Product Diversification/Expansion: Introduce new types of books or didactic materials that cater to different age groups or educational levels, broadening the customer base. 3. Improved Marketing and Visibility: Enhance online presence through social media, create an e-commerce platform, or improve in-store display and signage to make the shop more appealing and accessible. c) Describe for them, four methods that can be used to remunerate the three workers of this shop. 1. Fixed Salary: Workers receive a consistent, predetermined amount of money at regular intervals (e.g., monthly). This provides financial stability and security. 2. Commission: Workers earn a percentage of the sales they make. This incentivizes them to sell more and directly links their pay to their performance. 3. Piece-Rate System: Workers are paid a specific amount for each unit of output they produce or task they complete. This encourages higher productivity. 4. Bonuses: Additional payments given to workers for achieving specific targets, exceptional performance, or at the end of a successful period. This rewards outstanding contributions. d) Given your findings in question (a) above, will you advise BENCO to: (i) Increase its personnel? Give your reasons.* Yes, BENCO should consider increasing its personnel, especially if the current three workers are struggling to manage the workload, particularly with the more profitable Didactics (B) section. Increasing personnel could lead to better customer service, more efficient operations, and potentially higher sales, especially in the Didactics section which shows higher profitability and growth potential. (ii) Increase its scale of operations? Give your reasons.* Yes, BENCO should consider increasing its scale of operations, particularly focusing on the Didactics (B) section, which is significantly more profitable. Expanding the inventory, marketing, and possibly the physical space for didactic materials could capitalize on the higher demand and profit margins, leading to overall business growth. QUESTION 6: a) Present the information above in a balance sheet and show the results. Esunge and Co Cement PLC Balance Sheet as at 01/01/2022 | Assets | FCFA | Liabilities & Equity | FCFA | | :----------------------------------- | :---------- | :----------------------------------- | :---------- | | Non-Current Assets | | Equity | | | Building | 160,000 | Capital | 200,000 | | Transport Equipment | 30,000 | | | | Office Equipment | 35,000 | Non-Current Liabilities | | | | | Bank Loan | 100,000 | | Current Assets | | | | | Stock of Raw Materials | 25,000 | | | | Cash in Hand | 50,000 | | | | Total Assets | 300,000 | Total Liabilities & Equity | 300,000 | b) (i) Calculate the amount of non-current assets of the enterprise. Step 1: Identify all non-current assets. Non-current assets include Building, Transport equipment, and Office equipment. Step 2: Sum the values of these assets. Non-Current Assets = 160,000 FCFA + 30,000 FCFA + 35,000 FCFA = 225,000 FCFA Amount of non-current assets: 225,000 FCFA b) (ii) What are the amount or liabilities contracted by Esunge & Co? Step 1: Identify all liabilities. The only liability mentioned is the Bank loan. Amount of liabilities: 100,000 FCFA c) Name four non-monetary incentives that Mr. Esunge can use to motivate his employees to come out with a higher output. 1. Recognition and Appreciation: Publicly acknowledging and praising employees for their hard work and achievements, perhaps through "employee of the month" awards or shout-outs. 2. Opportunities for Training and Development: Providing access to workshops, courses, or mentorship programs that help employees enhance their skills and career prospects. 3. Flexible Working Arrangements: Offering options like flexible hours or remote work (if applicable) to improve work-life balance and reduce stress. 4. Improved Work Environment: Creating a positive, safe, and comfortable workplace, fostering a sense of community, and providing necessary tools and resources for efficient work. Drop the next question 📸