The following scenario is relevant to Questions $3\mathrm{.}13\mathrm{.}3.$

Countrymen Ltd produces and sells two different products in $1$kg bags, apples and pears. The following information regarding the products are available:

Apples $(1$ kg bag$)$

Pears $(1$ kg bag$)$

Selling price per unit

R$40$

R$45$

Variables expenses per bag

$($R$25)$

$($R$28)$

Contribution margin per bag

R$15$

R$17$

$22$; $23$; $242024$

$$ The Independent Institute of Education $($Pty$)$ Ltd $2024$ Page $8$ of $9$

During the most recent month, the company sold $500$ bags of apples and $350$ bags of pears. Fixed expenses are R$8000$ per month.

Required:

Q$\mathrm{.}3\mathrm{.}1$

Complete the following statement of profit or loss and other comprehensive income for the most recent month.

Apples

Pears

Total

Sales

Less: Variable expenses

Contribution margin

Less: Fixed expenses

Net profit $/($loss$)$

$(15)$

Q$\mathrm{.}3\mathrm{.}2$

Calculate Countrymen Ltd$$s overall monthly break$-$even point in units and Rand value.

Show formulas and workings.

$(11)$

Q$\mathrm{.}3\mathrm{.}3$

Explain what is likely to happen when a company has low fixed costs and high variable costs.