Business 0450 · IGCSE · Costs, scale of production and break-even analysis
Costs, scale of production and break-even analysis — practice question
ASZ is a public limited company. It manufactures a variety of garden tools, including digging forks and wheelbarrows, using production methods that have stayed the same for many years. All of ASZ’s products are sold through a wholesaler. The Marketing Director is thinking about altering the channel of distribution by selling products straight to retailers. To support decision making, the Operations Director has prepared some revenue and cost data (see Table 1). ASZ is also planning to introduce new technology, which will change production methods.
(a)[2]
What does the term ‘public limited company’ mean?
(b)[2]
Calculate the values for X and Y.
(c)[4]
Identify and explain two ways that ASZ could use cost data to support decision making.
(d)[6]
Identify and explain two ways in which new technology might change production methods at ASZ.
(e)[6]
Do you think ASZ ought to change its channel of distribution? Support your answer with reasons.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “A business whose shares may be sold to the general public” …