Business 7115 · O Level · Costs, scale of production and break-even analysis
Costs, scale of production and break-even analysis — practice question
DCP produces a variety of high-quality industrial paints. It sells directly to 6 major business customers who are based in different countries. DCP sets a price of $0.35 per litre. It competes in a highly competitive market. The Operations manager has been examining DCP's costs, as shown in Table 2. He wants to raise profit, but he does not wish to purchase cheaper materials.
(a)[2]
Identify two management functions.
(b)[2]
Calculate DCP's average cost for each litre.
(c)[4]
Identify and explain two methods DCP could use to communicate with its customers.
(d)[6]
Identify and explain two reasons why quality matters to DCP.
(e)[6]
Do you think charging a higher price is the best method for DCP to raise profit? 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: “Planning function” …