Business 7115 · O Level · Costs, scale of production and break-even analysis
Costs, scale of production and break-even analysis — practice question
FBW makes watches through job production. It employs 5 full-time production workers. Every worker receives regular training. Last year, FBW sold 600 watches. The Managing Director intends to use break-even analysis when deciding whether to raise the prices of its products. FBW’s current break-even chart is shown in Fig. 1.1.
(a)[2]
Identify two reasons why a business might provide training for its employees.
(b)[2]
Calculate the following from Fig. 1.1:
Break-even output;
Break-even revenue.
(c)[4]
Outline two possible effects on FBW’s break-even chart if the prices of its products are increased.
(d)[6]
Explain two benefits to FBW of employing full-time employees.
(e)[6]
Do you think job production is the best production method for a small 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: “Introduce a new process/new equipment” …