December 9, 2020

How to achieve profit maximisation objective. Reduce prices to increase sales Reduce the cost of production Diversify and expand production Expand market Increase prices of products Increase sales promotion campaigns.

When to use a credit note: When there are damaged goods When packing cases and containers are returned When there is overcharge resulting from an arithmetic error. When goods delivered are not in accordance with the order

i) Registered Capital –  Amount of capital that a company can raise from its registered members ii) Subscribed Capital –  The portion of issued share capital that has been accepted by the shareholders iii)   Issued Capital    –   The portion of the authorised share capital that has been offered to the shareholders. iv) Paid up capital –  

Benefits of savings and credit co-operative society (SACCO) Education Sharing of additional profits Loans can be advanced Savings Improved living standards Credit facilities eg Bank overdraft.

Problems of trade unions. Poor management Political interference Insufficient funds Lack of strike benefits High levels of unemployment Lack of patience during the negotiation period.

Reasons for rural industrialization policy. Creation of job opportunities in rural areas Provision of market for raw materials produced in rural areas. Balanced growth in the economy Reduced rural – urban migration / influx Increase incomes of rural population Rural population will get modern facilities like electricity, piped water, etc.

Function of commercial Banks Receiving deposits Advancing loans Transferring money Agents of the stock exchange market Custodian of valuable items

Methods of buying goods in instalment. –  Hire purchase –   A system where the buyer agrees to pay for the commodity in instalments.  The buyer obtains the possession of the article on the down payment (deposit) but the title of ownership remains wit the seller until the last instalment is made. Credit sales / Deferred

Sales promotion:   refers to the process whereby the demand for the products of a business enterprise is created in an attempt to increase sales.  It has to do with informing the consumers about the existence of a particular product, its quality and features, places of availability as well as the price of the product.  

Economies of scale refers to the benefits that a firm enjoys due to expanding its scale of production. Internal economies Administration: When a firm expands, its administrative expenses are distributed over greater output and the per unit cost decreases. Financial: Large firms have a good reputation hence can get loans from financial institutions. Marketing: Large

Sources of capital to small scale enterprise Personal funds / owners capital Borrowing from friends and relatives Members contribution Loan from banks and other non bank financial institutions Going public ie borrowing from the public by the use of stocks Venture capital ie a group of rich people with a pool of financial resources which

Methods of controlling volume of imports Tariffs –  Involves levying import duty on goods that are entering a country. Quotas –   Is a quantitative restriction permitting only a given number of units of a commodity to be imported during a specific period. Exchange control – Refers to control by the government on the exchange value