Business 7115 · O Level · Costs, scale of production and break-even analysis
Costs, scale of production and break-even analysis — practice question
Gino runs a fast-food restaurant that serves fried chicken and potato fries. He has 5 full-time chefs and 12 part-time workers who help to serve the food. Communication is important, so Gino holds regular meetings with his part-time employees to keep them updated about any menu changes. It took 3 years for Gino’s business to break-even. He wants to achieve a Return on Capital Employed (ROCE) of $10\%$. Gino is always searching for ways to increase the number of customers. Inflation could be a difficulty for Gino’s business.
(a)[2]
Define ‘break-even’ in business terms.
(b)[2]
Define ‘Return on Capital Employed’ in business terms.
(c)[4]
Outline two difficulties inflation could create for Gino’s business.
(d)[6]
Explain two methods Gino could use to increase the number of customers.
(e)[6]
Do you think regular meetings are a better way for a business to communicate with part-time employees than text messages do? 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: “At the point when total revenue matches total cost” …