Business 7115 · O Level · Costs, scale of production and break-even analysis
Costs, scale of production and break-even analysis — practice question
CHW makes electrical products, including cameras. The business is creating new products. The Managing Director understands that the stage of the product life cycle can shape CHW’s decisions about promotion. He is examining data for one of its products. An extract is shown in Table 3.1. The business also wants to bring flow production into the factory.
(a)[2]
Identify one benefit and one cost for a business that develops new products.
(b)[2]
Calculate the break-even level of output for 2021. Show your working.
(c)[4]
Outline two ways CHW could increase its margin of safety.
(d)[6]
Explain two ways in which the stage of the product life cycle might influence CHW’s marketing decisions about promotion.
(e)[6]
Do you think flow production is the best production method for a manufacturing business to use? 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: “Increase revenue/sales.” …