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1 Frank’s Fruits (FF)
Frank grows fruit, including oranges, on his farm in country J. He sells his fruit at a market in a local city one day a week. Frank is a sole trader and operates in the primary and tertiary sectors. He set up FF using all of his redundancy money from a previous job with a large company.
Frank’s business objective is to increase profit by 10% by the end of 2026. He also has a target profitability of 25% by the same date. He uses the data from break-even analysis to make business decisions.
Table 1.1 shows forecast data for the sale of oranges in July 2025.
Table 1.1 Forecast data for FF – July 2025
Sales (number of oranges) 5650 Total allocated fixed costs ($) 1350 Total variable costs ($) 2825 Selling price per orange ($) 0.80
Frank has two main competitors:
• a national supermarket with stores locally • a shop in the local city selling fruit.
Frank’s business is very successful as the fruit he sells is fresher than products sold by his competitors. This is Frank’s USP. His fruit is sold only a few hours after it is picked. However, the fruit sold by Frank’s competitors is grown hundreds of kilometres away. Customers also enjoy the range of fruit sold by Frank as it varies throughout the year.
Frank currently uses competitive pricing but is thinking of introducing price skimming in the future.
Identify one method of measuring the size of a business.
Identify one method of measuring the size of a business.