poyees Who all receive on-the-job training.

The Marketing Manager is analysing c

ut data ror product X. An extract isshown in Table1.1. Asproduct X is in the maturiy
Sstage of the product life cycle SSG is considering possible extension strategies.

Table 1.1

Extract from SSG's cost and output data for product X

Rent and other expenses per month $300 000
Variable cost per unit $80
Output per month 12 000

(a) De ne 'on-the-job training.

Ahen..the.rkers..axeAaed..a.te
JeXk.placeand.kt.heemplones.tkng
hee.. [2]

(b) Calculate total variable cost per month. Show your working.

$80XI2000.A6OQOO.
ota..Mtiabdecost.e..INOthz60DO .

(c) Identify four factors a business should consider when deciding which method of production
to use.

Factor1: usineas.8i:

..

tor 2:EXuseSE.dpe.usahes.iS.capta.
Aakstr..Aengive..
Factor
3:.cocducto. wseather.al. he..pr ā.ae
sCRMe..okhe.hame.to..be.ccsMie..
Factor
4:.Market. eakhex.....selh.s.
A.Oduc.on..OS..o..icke..gnadket

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 Topic: CH-I9 Date:ļ 8.22

Toledcoss(TC)=Flked eostt Varietke coste cy

Exd sosts-Theeasts that omain me epte e Cetal
eosts
level o atput in short nun is caled Fik cosfs
Eanple Rentsaay ef permanet worhe 3nsure
premiAm

VaribleCsts -The cst hetwatie nthdheenelo

Qtat is calledwarlabkecootá,
ErnelerCost of w materls direct beu
Aserogecosts (Ac)=
Ac AFc+AV
Averacgefed
Avesae cost Total Fired Cest TEC
AFC

AEC
FC
Fig-l(AF)

Ok TEC

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 PAGE NO. eeeeeeeeee*eee seesseeseeeses46$##

EXP.NO. eeeeee

DATE .....

1. Draw BEP ChaetArormthefolleutrginfermation.

Fixed cost = lb000
Variable cost ger unik
TC = FC+ VC
Latour 200 IS000 +lao0kboO)
R/M lo0
Ohers = ]00
600O +20O000
Sellingerie = 900 I6000%
Tetal output= 500 Reverue PkQ
C
) akulakpra t 460000
nCalcalatemarain of safe
BEP= 1BOO0
|AAns- q00- 400
30
460

P R-TC
T50

43460
200 200 400 506

BEP= Fixedcost
Seling ice- Voriablecost

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 Explanation:
.XE...shab. .chek..mke..af.csASeer
.slihq..„KE.ehc...cose...h..shaghiska...
..has...ha..ksA..eX.ot. .shags..t...
.are..Nekhg..te..mniaad.eotes.akas
actor2: ..Level..oE..s.eNAsaa.

xplanation: TAE.Lasaína.he.. shep.juhe...hergks...isgh

.amikon..n...noke....ef cudtAo.IKE.fe
geherot..Evehue..anl..may..deseas..ets.
.[6]
......KMEN..NG..

(e) Do you think TXE should sell a wider rangeof products? Justify your answer.

I.JA..spre cud..skint...the.morket..and..E..
maybe
.able.. .coe...p..theos.£on.he..KEKE
eOANS.kg..sollhgctothes.teie.IXES...ps s..
.mas..alo..nceaseas..il..e..eterlna.Ads.
a.hes.matek yIXE.y.be...kke..s.tac.
AN.esd.Sornerauhieh..abA.Ihcessse.TXES.
.XEMAOUE.Hosener...JXE. ..haMe..te..hceSSE..ts.
serdihg.saish.s.ARndaly.dees. Lks.and.
IXE..ma.net..hae.eengh.kunds.Awden.ih.greclacds..
Smge6..J..hink..AE.shaukd.et.sEAl.a..Jwide..ange
.psashs..st...ksiness.M.et.alt cutAt.hetlke.(6)

©UCLES 2017

0450/12/F/MI17

[Turn over

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 in Table 1. He thinks it is impornan w
the cash ow position.
Table 1: QAC's cash ow forecast for April - June 2017($000)
June
May
April 460
400
300
Cash in:
140
Cash out: 140
140 180
Labour costs 180
120 100
Inventory costs 100
100 420
Fixed costs 420
360 ?
Total cash out (20)
Net cash ow
(60) (50)
30 (30) ?
Opening balance (50)
(30)
Closing balance

(a) What is meant by 'batch production'?

.I..6.here....s
untitys.Ne.pfsdsest...s.kaske...
..hen....m.gai..of...saNAhe.ke.te..
..pdacad... ...2]

(b) Calculate the following values in June.

*******"
Netcash ow: ...6s.420.4.
....2]
Closing
balance: ......O..Q6
(c) ldentify and explain two advantages to QAC of having a high level of inventory.

Advantage1: ehekt.tsem.eMAMİSS..at..ae

Explanation:
.As.a A.he..able.to.gin...beet..ken.
.djscoLunAsptsd.ta.lk..pGhaes.uhiuh. il.see.sgrE csts.
: Aast.psdsask.ion.
Advantage Reoducon(allnt.op
Eyplanation:QAL.MA.ke.abk...ast. Lap.assks.insAantd,
ahd..ma..ka..akke.t.654la.pedAacts.aske.aaaSerKes(4)

©UCLES2017
0450/12/F/M/17

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