Business 7115 · O Level · Enterprise, business growth and size
Enterprise, business growth and size — practice question
DJU makes clothing such as jeans and trousers. Its factory has 90 employees. DJU applies specialisation when producing its goods. The Managing Director is examining DJU’s cost and output figures. An extract is given in Table 4.1. She wants to find out how lower interest rates could influence the business. DJU’s directors are looking at different ways a business may grow, including taking over a competitor.
(a)[2]
Define ‘fixed costs’.
(b)[2]
Calculate DJU’s average cost per unit per week. Show your working out.
(c)[4]
Outline two effects lower interest rates might have on DJU.
(d)[6]
Explain one advantage and one disadvantage for DJU of using specialisation when making its products.
(e)[6]
Do you think the benefits of taking over a competitor are greater than the drawbacks? 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: “Expenses that stay unchanged when output/sales change” …