Business 7115 · O Level · Costs, scale of production and break-even analysis

Costs, scale of production and break-even analysis — practice question

Use the information in Appendix 2.
(a(i))[2]

Calculate the monthly break-even output level.

(a(ii))[2]

Calculate the monthly margin of safety for tables.

(a(iii))[4]

Identify four drawbacks of using break-even analysis.

(b)[12]

Refer to Appendix 2 and Appendix 3 plus the other information. Consider these three ways FO could use to contribute to sustainable development: • use only raw materials from sources that replace what they use • use only packaging that can be recycled • use only electric vehicles to deliver products. Which way should FO choose to maximise profit? Justify your answer.

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