Business 0450 · IGCSE · Costs, scale of production and break-even analysis
Costs, scale of production and break-even analysis — practice question
Autovision is a business in the private sector that is based in Europe. It produces specialist glass for cars and enjoys economies of scale. Quality assurance matters to Autovision. In recent years, the Operations Director has installed new technology, altering the production process. ‘It was expensive to buy, but we have 20 fewer workers than 3 years ago and can now make many different designs.’ Autovision sells 50% of its products in Asia. The Operations Director believes Autovision ought to relocate to Asia.
(a)[2]
Identify two characteristics of a private sector business.
(b)[2]
What is the meaning of ‘quality assurance’?
(c)[4]
Identify and explain two economies of scale that could benefit Autovision.
(d)[6]
Identify and explain two ways in which new technology may have altered production methods at Autovision.
(e)[6]
Do you think Autovision should relocate? Give reasons for your answer.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Not in government ownership” …