Consider the info provided below as well as the financial statements and answer the questions that follow. Pearson & Litt is a manufacturing company in the Eastern Cape. Their factory

Consider the info provided below as well as the financial statements and answer the questions that follow. Pearson & Litt is a manufacturing company in the Eastern Cape. Their factory manufactures glass wine bottles for the Blue Valley Beer Co. For 2019 and 2020 respectively : Sales price per unit R15 and R19 Variable cost per unit R6 and R7 Fixed cost (FC) per annum R650 000 and R 855 500 Fixed cost per unit R3 and R4 Current assets R450 600 and R560 700 Current liabilities R510 000 and R780 000 Retained profit R21 809 and R17 600 Net Sales R2 900 320 and R 3 100 100 Cost of sales R390 000 and R475 000 Financial planning forms an integral part of the strategic planning of a firm. Q.1 Differentiate between traditional budgeting and zero‐base budgeting. Q.2 Recommend one of these budgeting methods to Pearson & Litt and provide reasons for your recommendation.

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