Business 0450 · IGCSE · Costs, scale of production and break-even analysis
Costs, scale of production and break-even analysis — practice question
CTF is an ethical business. It makes a variety of toys. CTF competes in a competitive market. Over time, technology has altered production at CTF. The Operations Manager is examining break-even information. Table 3.1 shows an extract of the cost and revenue data for product X. After the closure of its local supplier, the Operations Manager is thinking about importing raw materials for product X.
(a)[2]
Define what is meant by ‘ethical business’.
(b)[2]
Calculate the total variable cost for product X. Show how you got your answer.
(c)[4]
Outline one benefit and one limitation for CTF of using break-even analysis.
(d)[6]
Explain two ways technology could have changed production at CTF.
(e)[6]
Do you think reliability of the supplier is the most important factor for a large manufacturing business to weigh up when deciding whether to import materials? Justify your answer.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “An organisation that makes decisions according to a moral code” …