4.2.1 Identify and classify costs: • Classifying costs using examples, e.g. fixed, variable, average, total
• Use cost data to help make simple cost-based decisions, e.g. to stop production or continue
4.2.2 Economics and diseconomies of scale: • The concept of economies of scale with examples, e.g. purchasing, marketing, financial, managerial, technical
• The concept of diseconomies of scale with examples, e.g. poor communication, lack of commitment from employees, weak coordination
4.2.3 Break-even analysis: • The concept of break-even
• Construct, complete or amend a simple break-even chart
• Interpret a given chart and use it to analyse a situation
• Calculate break-even output from given data
• Define, calculate and interpret the margin of safety
• Use break-even analysis to help make simple decisions, e.g. impact of higher price
• Understand the limitations of break-even analysis
Sample questions and answers
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