Business 0450 · IGCSE · Enterprise, business growth and size
Enterprise, business growth and size — practice question
DJU makes clothing such as jeans and trousers, and its factory employs 90 people. Specialisation is used in production. The Managing Director is examining DJU’s cost and output figures, and an extract appears in Table 4.1. She also wants to find out how lower interest rates could influence the business. DJU’s directors are looking at several methods of business growth, including buying a competitor.
(a)[2]
Define ‘fixed costs’.
(b)[2]
Calculate the average cost per unit per week for DJU. Show your working.
(c)[4]
Outline two effects lower interest rates might have on DJU.
(d)[6]
Explain one benefit and one drawback to DJU of using specialisation when producing its goods.
(e)[6]
Do you think the benefits of taking over a competitor are greater than the drawbacks? 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: “Expenses that stay unchanged with the level of output/sales” …