Study the information provided below and answer each of the following questions independently: 3.1. Calculate the operating profit/loss at the end of the first six months of operations. (5 marks) 3.2. Calculate the break-even value per month during the first six months of operations. (5 marks) 3.3. Calculate the total Operating profit/loss per month, if Proposal 1 is implemented. (5 marks) 3.4. How many liters of petrol need to be sold to achieve an operating profit of R301 625 each month, if Proposal 2 is accepted? (5 marks) 3.5. Calculate the reduction in monthly fixed costs that is necessary to yield a profit of R300000, if Proposal 3 is accepted.

INFORMATION An entrepreneur recently opened a filling station. Diesel is sold at R15 per liter and the variable costs total R12 per liter. The fixed costs per month are R270 000. After six months of trading, the sales achieved were 1080000 liters and the sales volume has remained at the same level each month. In an attempt to improve performance, the entrepreneur is considering the following proposals: Proposal 2 The entrepreneur wants an operating profit of R301 625 per month. To achieve this the following changes are suggested: - Selling price is reduced by R0.20 per litre. - A sales commission of R0.50 per litre sold will be granted to the fuet attendants. An additional R5 875 per month will be spent on advertising. Proposal 3 The possibiliy of only operating from 06.00 to 20.00 is beng considered. This earier closing tine is expected to result in a loss in sales of 25000 litres on average per month. It is hoped that the saving in fixed costs resulting from the reduction in operating hours will enable the entreprenour to ach eve an average montify profit of at least R300 000