Business 0450 · IGCSE · Costs, scale of production and break-even analysis
Costs, scale of production and break-even analysis — practice question
GHT is a public limited company making steel items such as gates and garage doors. It has a flat organisational structure and a short chain of command. GHT has many stakeholder groups, including 600 employees. The Managing Director is thinking about introducing job rotation to raise employee motivation, and he has also been examining some financial information. An extract appears in Table 3.1.
(a)[2]
Define ‘fixed cost’ in your own words.
(b)[2]
Calculate the margin of safety for product X in 2020, and show how you worked it out.
(c)[4]
Outline two benefits to GHT of having a short chain of command.
(d)[6]
Explain one advantage and one disadvantage to GHT of using job rotation to raise employee motivation.
(e)[6]
Do you think shareholders are the most important stakeholder group in determining the success of a limited company? Justify your view.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Costs that stay unchanged when output/sales change” …