Business 0450 · IGCSE · Costs, scale of production and break-even analysis
Costs, scale of production and break-even analysis — practice question
DCP manufactures a range of high-quality industrial paints. It sells directly to 6 large business customers, each based in a different country. DCP charges $0.35 per litre. It competes in a competitive market. The Operations manager has been reviewing DCP's costs in Table 2. He wants to raise profit but does not want to buy cheaper materials.
(a)[2]
Identify two management functions.
(b)[2]
Calculate the average cost per litre for DCP.
(c)[4]
Identify and explain two ways DCP might communicate with its customers.
(d)[6]
Identify and explain two possible reasons why quality matters to DCP.
(e)[6]
Do you think that charging a higher price is the best method for DCP to increase profit? 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: “Planning function” …