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M06/3/BUSMT/SP2/ENG/TZ0/XX2206-5104– 3 –Turn over 2. Teddybears Picnics LtdTeddybears Picnics Ltd produces teddy bears. Financial information includes:2004($)2005($)Fixed assets10 00010 000Sales revenue22 00024 000Cash1 2001 000Stock4 8005 200Debtors2 9003 200Cost of sales8 4008 900Creditors3 2003 400Retained profit8 7009 900Overheads4 4005 000Long term liabilities7 0006 100(a) Define the following terms:(i) fixed assets(ii) current assets(iii) current liabilities.[6 marks](b) Construct a profit and loss account for Teddybears Picnics Ltdfor each of the years 2004 and 2005.[5 marks](c) Produce a balance sheet for Teddybears Picnics Ltdfor each of the years 2004 and 2005.[6 marks](d) Identify threeways in which Teddybears Picnics Ltdcan improve their net profit.[3 marks]
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N06/3/BUSMT/SP2/ENG/TZ0/XX8806-5014– 6 –5. Seifert SawmillThe Seifert Sawmillhas operated in Sweden for 80 years. Daniel Seifert, the managing director, provided the following data on a proposal to set up a Sawmill in Latin America.Table 1Fixed costs$800 000 per annumVariable costs$1000 per batchSelling price$4000 per batchForecast sales500 batches per annumTable 2The fixed costs per annum: $The variable costs: $Directors fees 200 000Rent 250 000Annual logging licence 100 000Depreciation 70 000Interest 150 000Other expenses 30 000Direct labour 300 per batchMachine hire 100 per batchElectricity 100 per batchVehicle running costs 100 per batchMaterials 400 per batchSeifert Sawmillshas hired a management consultancy firm, Business Dynamics, to assess the business environment in Latin America. The following is a summary of their findings:•the local and regional construction industry is showing strong signs of recovery from recession•the recent national elections resulted in the PBP political party being re-elected with policies favouring the business community•the local currency has been pegged to the US dollar in an attempt to improve business confidence and contain inflation•the trade union movement in Latin America is getting stronger. There is a widespread belief among employees that trade unions offer the only real hope of improving living standards•global and local environmental groups are gaining in popularity and political influence•there is a growing use of synthetic materials in the construction industry rather than timber.(a) Use the data in Table 1 to prepare a break-even chart for Seifert Sawmill.[6 marks](b) Identify on your chart the margin of safety and profit if 500 batches are sold.[2 marks](c) Assuming 500 batches are sold, construct a forecast profit and loss account using the data provided in Table 2.[6 marks](d) Use a PEST/STEP framework to evaluate twoexternal factors which might influence Seifert Sawmill’sdecision to set up a sawmill in Latin America.[6 marks]