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‫ ﻣﺤﻤﺪ ﺍﻟﺮﻣﻀﺎﻥ‬- 65065026‫ ﺗﻮﺍﺻﻠﻮﺍ ﻣﻌﻨﺎ ﻭﺍﺗﺴﺎﺏ‬- ‫ﻣﺘﻮﻓﺮ ﻣﻠﺨﺼﺎﺕ ﻭﻣﻠﻔﺎﺕ ﻣﻔﻴﺪﻩ ﻟﺠﻤﻴﻊ ﻣﻮﺍﺩ ﺍﻟﺠﺎﻣﻌﺔ ﺍﻟﻌﺮﺑﻴﺔ ﺍﻟﻤﻔﺘﻮﺣﺔ

ﻣﺠﺎﻧﻴﺔ‬
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Question One (25 Marks) (Expected time: 40-45 min)

“The terms 'mission' and 'vision' are often used


interchangeably”. Discuss the difference between “Mission
statement” and Vision statement” in terms of the definition
and purpose with
examples to support your answer.

‫ﻣﺤ‬
Mission statement Definition: sets out what the organisation wants to
be. It should be the starting point for setting objectives and making
strategic decisions
Mission statement purpose: its purposes (why the organisation exists,

‫ﻤﺪ‬
for example, to meet a specified need)
Example: TED “Spread ideas “

Vision statement Definition is a framework that includes the guiding


philosophy, core values, beliefs and purposes from which the mission
‫ﺍ‬
statement is developed
Vision statement purpose is to encourage management teams at the
‫ﻟﺮ‬

corporate level, the business unit, or the brand level, to think in detail
Example: San Diego Zoo: To become a world leader at connecting people to
wildlife
‫ﻣﻀ‬

Question Two (25 Marks) (Expected time: 40-45 min)

Discuss “The psychological contract” and “Employee


‫ﺎﻥ‬

empowerment” and “Reasons for involvement &


empowerment”.

The psychological contract: represents the mutual beliefs,


perceptions, and informal obligations between an employer and an
employee. sets the dynamics for the relationship and defines the
detailed practicality of the work to be done It is distinguishable from
the formal written contract of employment
‫ ﻣﺤﻤﺪ ﺍﻟﺮﻣﻀﺎﻥ‬- 65065026‫ ﺗﻮﺍﺻﻠﻮﺍ ﻣﻌﻨﺎ ﻭﺍﺗﺴﺎﺏ‬- ‫ﻣﺘﻮﻓﺮ ﻣﻠﺨﺼﺎﺕ ﻭﻣﻠﻔﺎﺕ ﻣﻔﻴﺪﻩ ﻟﺠﻤﻴﻊ ﻣﻮﺍﺩ ﺍﻟﺠﺎﻣﻌﺔ ﺍﻟﻌﺮﺑﻴﺔ ﺍﻟﻤﻔﺘﻮﺣﺔ ﻣﺠﺎﻧﻴﺔ‬

Employee empowerment:
is a strategy and philosophy that enables employees to make
decisions about their jobs, it helps employees own their work and take
responsibility for their results, it helps employees own their work and
take responsibility for their results

Reasons for involvement & empowerment:


1- enhanced commitment from employees.
2- encourage all workers to pull in the same direction.
3- Increased competition, instability, uncertainty in the global

‫ﻣﺤ‬
economy mean that managers can no longer have the capacity to
issue command
4- The cost of maintaining hierarchies is increasing

‫ﻤﺪ‬
Question Three (25 Marks) (Expected time: 40-45 min)
A company is manufacturing product X and the selling price
‫ﺍﻟ‬
is $5,000, while the variable cost for each unit is $2000,
mean while the fixed cost of the operation will be $300,000.
Calculate the break-even in units (Write all formulas). Also,
‫ﺮ‬

define and discuss the “Break-even concept”


‫ﻣﻀ‬

Break-even= fixed cost / contribution per unit

contribution per unit = selling price - variable cost


‫ﺎﻥ‬

contribution per unit = 5000 – 2000 = 3000$

Break-even = 300,000 / 3000 =100$

Break-even: is the point of balance between making either a profit or a


loss
Break-even concept: used to assess the feasibility of a project. This
method not
only accounts for all costs, it also includes the opportunity costs of
‫ ﻣﺤﻤﺪ ﺍﻟﺮﻣﻀﺎﻥ‬- 65065026‫ ﺗﻮﺍﺻﻠﻮﺍ ﻣﻌﻨﺎ ﻭﺍﺗﺴﺎﺏ‬- ‫ﻣﺘﻮﻓﺮ ﻣﻠﺨﺼﺎﺕ ﻭﻣﻠﻔﺎﺕ ﻣﻔﻴﺪﻩ ﻟﺠﻤﻴﻊ ﻣﻮﺍﺩ ﺍﻟﺠﺎﻣﻌﺔ ﺍﻟﻌﺮﺑﻴﺔ ﺍﻟﻤﻔﺘﻮﺣﺔ ﻣﺠﺎﻧﻴﺔ‬

the capital required to develop a project

Question Four (25 Marks) (Expected time: 40-45 min)


Discuss "The four E’s” and “Understanding quality”.

The four E’s:

‫ﻣﺤ‬
Effectiveness: is the extent to which an organization achieves its goals

Efficiency: describes how well an organization transforms inputs into

‫ﻤﺪ‬
outputs.
An organization becomes more efficient as it produces more or better
outputs
for the same inputs

Economy: describes how cheaply the inputs can be purchased. Economy


‫ﺍﻟ‬
is
important when managers are constrained by fixed budgets
‫ﺮ‬

Ethics: is the extent to which the behavior of an organization and its


members are acceptable
‫ﻣﻀ‬
‫ﺎﻥ‬

Understanding quality:
quality organizational culture, there will be a commitment to satisfying
the customer. The quality is defined as the extent to which the final
product sufficiently
meets the customer’s requirements
Ideally, an organization should also be working on supplying more than
the customer
wanted to insure repeated orders
‫ ﻣﺤﻤﺪ ﺍﻟﺮﻣﻀﺎﻥ‬- 65065026‫ ﺗﻮﺍﺻﻠﻮﺍ ﻣﻌﻨﺎ ﻭﺍﺗﺴﺎﺏ‬- ‫ﻣﺘﻮﻓﺮ ﻣﻠﺨﺼﺎﺕ ﻭﻣﻠﻔﺎﺕ ﻣﻔﻴﺪﻩ ﻟﺠﻤﻴﻊ ﻣﻮﺍﺩ ﺍﻟﺠﺎﻣﻌﺔ ﺍﻟﻌﺮﺑﻴﺔ ﺍﻟﻤﻔﺘﻮﺣﺔ ﻣﺠﺎﻧﻴﺔ‬

Internal quality: internal to the organization and should involve all staff
A quality culture will be energetic and focused on the customer

Question One (25 Marks) (Expected time: 40-45 min)

Explain the Ansoff Matrix with its four options (15 marks)
And explain "Push and Pull marketing strategies” (10
marks).

‫ﻣﺤ‬
Ansoff Matrix: It is a way of presenting the strategic options that are
open to an organization in relation to its products or services

‫ﻤﺪ‬
The four options are:
1- Market penetration: This option is to seek extra sales for the
product in the
present market
‫ﺍﻟ‬
2- Market development: the organization can seek to find new
markets for the current product
3- Product development: the organization may modify the product
‫ﺮ‬

and seek customers for it in the present market


4- Diversification: a new product to be marketed in new markets
‫ﻣﻀ‬

Push and Pull marketing strategies:


Pull strategy: customers and distributors are pulled toward the
branded product
‫ﺎﻥ‬

Push strategy: promotional activities aim to push the product to the


consumer

Question Two (25 Marks) (Expected time: 40-45 min)

Discuss “The psychological contract” (7 marks), “Employee


empowerment” (7 marks) and 360-degree feedback with its
underlying rationale" (11 marks)
‫ ﻣﺤﻤﺪ ﺍﻟﺮﻣﻀﺎﻥ‬- 65065026‫ ﺗﻮﺍﺻﻠﻮﺍ ﻣﻌﻨﺎ ﻭﺍﺗﺴﺎﺏ‬- ‫ﻣﺘﻮﻓﺮ ﻣﻠﺨﺼﺎﺕ ﻭﻣﻠﻔﺎﺕ ﻣﻔﻴﺪﻩ ﻟﺠﻤﻴﻊ ﻣﻮﺍﺩ ﺍﻟﺠﺎﻣﻌﺔ ﺍﻟﻌﺮﺑﻴﺔ ﺍﻟﻤﻔﺘﻮﺣﺔ ﻣﺠﺎﻧﻴﺔ‬

The psychological contract: represents the mutual beliefs,


perceptions, and informal obligations between an employer and an
employee. sets the dynamics for the relationship and defines the
detailed practicality of the work to be done It is distinguishable from
the formal written contract of employment

Employee empowerment: is a strategy and philosophy that enables


employees to make decisions about their jobs, it helps employees own
their work and take responsibility for their results, it helps employees
own their work and take responsibility for their results

‫ﻣﺤ‬
360-degree feedback: also known as the multi-rater and multisource
feedback method, feedback are gathered from a variety of people

‫ﻤﺪ‬
with whom the individual interacts (line manager - co-workers and
colleagues)

The underlying rationale has two elements:


First, it corrects for the bias and the imperfect and incomplete
information.
‫ﺍﻟ‬
Second, it encourages self-awareness and personal development by
allowing
‫ﺮ‬

individuals to identify and reflect on the gap between themselves and


others
‫ﻣﻀ‬

Question Three (25 Marks) (Expected time: 40-45 min)

A company is manufacturing product X and the selling price


‫ﺎﻥ‬

is $900, while the variable cost for each unit is $300, mean
while the fixed cost of the operation will be $120,000.
Calculate the break even in units (Write all formulas). Also,
define "Return on capital employed"

Break-even= fixed cost / contribution per unit

contribution per unit = selling price - variable cost

contribution per unit = $900 – $300 = $600


‫ ﻣﺤﻤﺪ ﺍﻟﺮﻣﻀﺎﻥ‬- 65065026‫ ﺗﻮﺍﺻﻠﻮﺍ ﻣﻌﻨﺎ ﻭﺍﺗﺴﺎﺏ‬- ‫ﻣﺘﻮﻓﺮ ﻣﻠﺨﺼﺎﺕ ﻭﻣﻠﻔﺎﺕ ﻣﻔﻴﺪﻩ ﻟﺠﻤﻴﻊ ﻣﻮﺍﺩ ﺍﻟﺠﺎﻣﻌﺔ ﺍﻟﻌﺮﺑﻴﺔ ﺍﻟﻤﻔﺘﻮﺣﺔ ﻣﺠﺎﻧﻴﺔ‬

Break-even= $120000 / $600 = $200

Return on capital employed: is a financial ratio that prove the value of


the business gain from its assets and liabilities.

Question Four (25 Marks)

"HR policy concerns the flow of people into, through and out

‫ﻣﺤ‬
of an organization, what is included in these policies and
what do managers need to do in these choices? (15 marks)
Also, discuss “The four E’s” while evaluating performance

‫ﻤﺪ‬
(10 marks)

HR policies:
1. Planning for staffing needs
2. Selecting and recruiting the right people
3. Their induction into the organisation
‫ﺍﻟ‬
4. Internal staffing and promotion decisions
5. management of employees
6. exit from the organisation, whether voluntary or involuntary
‫ﺮ‬

Managers need to make such choices:


‫ﻣﻀ‬

- the extent to which they rely on temporary or permanent staff


- the flexibility they require from employees
- invest in employee development and training or recruit
- meet changes in demand by varying the numbers employed or
‫ﺎﻥ‬

hours worked

The four E’s:


Effectiveness: is the extent to which an organization achieves its
goals
Efficiency: describes how well an organization transforms inputs
into outputs.
An organization becomes more efficient as it produces more or
better outputs
‫ ﻣﺤﻤﺪ ﺍﻟﺮﻣﻀﺎﻥ‬- 65065026‫ ﺗﻮﺍﺻﻠﻮﺍ ﻣﻌﻨﺎ ﻭﺍﺗﺴﺎﺏ‬- ‫ﻣﺘﻮﻓﺮ ﻣﻠﺨﺼﺎﺕ ﻭﻣﻠﻔﺎﺕ ﻣﻔﻴﺪﻩ ﻟﺠﻤﻴﻊ ﻣﻮﺍﺩ ﺍﻟﺠﺎﻣﻌﺔ ﺍﻟﻌﺮﺑﻴﺔ ﺍﻟﻤﻔﺘﻮﺣﺔ ﻣﺠﺎﻧﻴﺔ‬

for the same inputs


Economy: describes how cheaply the inputs can be purchased.
Economy is
important when managers are constrained by fixed budgets

Ethics: is the extent to which the behavior of an organization and


its members are acceptable

‫ﻣﺤ‬
Question One (25 Marks) (Expected time: 40-45 min)

‫ﻤﺪ‬
A) Discuss the sources of competitive advantages. (10
marks)

1-Cost leadership: the organization is the low-cost producer in its


‫ﺍﻟ‬
sector. Low-cost production should not be confused with low pricing It
is when the organization can sustain cost leadership by producing
goods or services at a lower cost than its competitors (while
maintaining quality)
‫ﺮ‬

2- Differentiation: an organization following a differentiation strategy


‫ﻣﻀ‬

seeks to offer extra advantages to its customers It identifies particular


elements in the product that are important to the customers and
makes product more attractive and unique
‫ﺎﻥ‬

These elements can be either the product’s specifications, quality,


style, or packaging.

B) Explain the costumer's decision-making process in


buying behavior. (15 marks)

The more complex a buying decision the more we rely on people


around us for help. There are two dimensions to these purchase
decisions: the extent of the decision making, and the degree of
involvement for example:
‫ ﻣﺤﻤﺪ ﺍﻟﺮﻣﻀﺎﻥ‬- 65065026‫ ﺗﻮﺍﺻﻠﻮﺍ ﻣﻌﻨﺎ ﻭﺍﺗﺴﺎﺏ‬- ‫ﻣﺘﻮﻓﺮ ﻣﻠﺨﺼﺎﺕ ﻭﻣﻠﻔﺎﺕ ﻣﻔﻴﺪﻩ ﻟﺠﻤﻴﻊ ﻣﻮﺍﺩ ﺍﻟﺠﺎﻣﻌﺔ ﺍﻟﻌﺮﺑﻴﺔ ﺍﻟﻤﻔﺘﻮﺣﺔ ﻣﺠﺎﻧﻴﺔ‬

1- High involvement and high decision-making leads to complex


decision making like buying a car or house
2- High involvement and low decision-making leads to brand loyalty
such as Cellphones
3- low involvement and high decision-making leads to Limited
decision making such us food
4- low involvement and low decision-making leads to habitual
buying behavior such as bottled water

Question Two (25 Marks) (Expected time: 40-45 min)

‫ﻣﺤ‬
A) Define pricing strategies and discuss each of these
pricing policies. (15 marks)

‫ﻤﺪ‬
pricing strategies: have a powerful effect on an organization's financial
viability in the short term, but it is a key element for long-term and
need to be set at a level that provide profit
‫ﺍﻟ‬
Prices must be:
1- Provide the customer with value for money
2- Cover the cost
3- Be competitive
‫ﺮ‬

4- Be consistent with company objectives


‫ﻣﻀ‬

pricing policies:
1- Penetration pricing: objective is for a new product with high
volume sales and low production cost, to expand in a new
‫ﺎﻥ‬

market
2- Marginal pricing: to boost the company’s volume and reduce
overall cost
3- Market-based: pricing the product can be priced as the customer
is willing to pay according to the market
4- Loss leading: price is below cost to attract initial customers
5- Skimming: charging high price for a short term
‫ ﻣﺤﻤﺪ ﺍﻟﺮﻣﻀﺎﻥ‬- 65065026‫ ﺗﻮﺍﺻﻠﻮﺍ ﻣﻌﻨﺎ ﻭﺍﺗﺴﺎﺏ‬- ‫ﻣﺘﻮﻓﺮ ﻣﻠﺨﺼﺎﺕ ﻭﻣﻠﻔﺎﺕ ﻣﻔﻴﺪﻩ ﻟﺠﻤﻴﻊ ﻣﻮﺍﺩ ﺍﻟﺠﺎﻣﻌﺔ ﺍﻟﻌﺮﺑﻴﺔ ﺍﻟﻤﻔﺘﻮﺣﺔ ﻣﺠﺎﻧﻴﺔ‬

B) Explain the push and pull strategies companies adopt to


communicate with customers.

Push and Pull strategies:


Pull strategy: customers and distributors are pulled toward the branded
product

Push strategy: promotional activities aim to push the product to the


consumer

‫ﻣﺤ‬
(10 marks)

‫ﻤﺪ‬
Question Three (25 Marks) (Expected time: 40-45 min)

A) A company is manufacturing product X and the selling


price is $300, while the variable cost for each unit is $100,
‫ﺍﻟ‬
meanwhile the fixed cost of the operation will be $10,000.
Calculate the break-even in units. (Write down the formulas
used). (13 marks)
‫ﺮ‬

Break-even= fixed cost / contribution per unit


‫ﻣﻀ‬

contribution per unit = selling price - variable cost

contribution per unit = 300 – 100 = 200$


‫ﺎﻥ‬

Break-even = 10,000 / 200 =50$

Question Four (25 Marks)


‫ ﻣﺤﻤﺪ ﺍﻟﺮﻣﻀﺎﻥ‬- 65065026‫ ﺗﻮﺍﺻﻠﻮﺍ ﻣﻌﻨﺎ ﻭﺍﺗﺴﺎﺏ‬- ‫ﻣﺘﻮﻓﺮ ﻣﻠﺨﺼﺎﺕ ﻭﻣﻠﻔﺎﺕ ﻣﻔﻴﺪﻩ ﻟﺠﻤﻴﻊ ﻣﻮﺍﺩ ﺍﻟﺠﺎﻣﻌﺔ ﺍﻟﻌﺮﺑﻴﺔ ﺍﻟﻤﻔﺘﻮﺣﺔ ﻣﺠﺎﻧﻴﺔ‬

A) Discuss "Transformation leadership" and the


characteristics of its leader. (10 marks)

Transformational leaders motivate followers to work towards goals


that prompt self-interests – to strive for higher-order outcomes
sometimes described as thecharismatic, or visionary, leader

Characteristics:
1- charisma: provides vision and sense of mission

‫ﻣﺤ‬
2- Inspiration: expresses important purposes in a simple way and
use symbols to focus efforts
3- Intellectual stimulation: promotes intelligence and problem

‫ﻤﺪ‬
solving
4- Individualized consideration: gives personal attention, coaches
and advises
B) Discuss the selection interview, performance appraisal and
mentoring. (15 marks)
selection interview: The aim of the selection interview is to
‫ﺍﻟ‬
ascertain whether the candidate is interested in the job and
competent to do it. to explain the work of the organization and to
set expectations on both sides
‫ﺮ‬

Performance appraisals: It is a method by which the job performance of


an employee is evaluated, part of careerdevelopment and consist of
‫ﻣﻀ‬

regular reviews

Mentoring: is a powerful personal development and empowerment tool


‫ﺎﻥ‬

It is an effective way of helping people to progress in their careers It is


a partnership between two people (mentor and mentee)

Question Five (25 Marks) (Expected time: 40-45 min)

A) Discuss Monitoring and Evaluation and the four Es (10 marks)


Monitoring and Evaluation: how organizations can improve their
performance by more effective control over people, operations and
processes, this involves a performance, analysis and reporting of
information
‫ ﻣﺤﻤﺪ ﺍﻟﺮﻣﻀﺎﻥ‬- 65065026‫ ﺗﻮﺍﺻﻠﻮﺍ ﻣﻌﻨﺎ ﻭﺍﺗﺴﺎﺏ‬- ‫ﻣﺘﻮﻓﺮ ﻣﻠﺨﺼﺎﺕ ﻭﻣﻠﻔﺎﺕ ﻣﻔﻴﺪﻩ ﻟﺠﻤﻴﻊ ﻣﻮﺍﺩ ﺍﻟﺠﺎﻣﻌﺔ ﺍﻟﻌﺮﺑﻴﺔ ﺍﻟﻤﻔﺘﻮﺣﺔ ﻣﺠﺎﻧﻴﺔ‬

The four E’s:

Effectiveness: is the extent to which an organization achieves its goals

Efficiency: describes how well an organization transforms inputs into


outputs.
An organization becomes more efficient as it produces more or better
outputs
for the same inputs

‫ﻣﺤ‬
Economy: describes how cheaply the inputs can be purchased.
Economy is
important when managers are constrained by fixed budgets

‫ﻤﺪ‬
Ethics: is the extent to which the behavior of an organization and its
members are acceptable

B) Discuss the Traditional control process and the business


‫ﺍﻟ‬
excellence model. (15 marks)

Traditional control process is:


‫ﺮ‬

1- setting objectives and establishing standards of performance


‫ﻣﻀ‬

2- identifying performance measures, carrying out tasks


3- monitoring progress by comparing performance
4- acting on results of monitoring and taking corrective action
‫ﺎﻥ‬

business excellence model: is a tool for self-assessment that helps to


quantify quality practices and performance organizations can identify
areas of underperformance and make efforts for improvement
‫ ﻣﺤﻤﺪ ﺍﻟﺮﻣﻀﺎﻥ‬- 65065026‫ ﺗﻮﺍﺻﻠﻮﺍ ﻣﻌﻨﺎ ﻭﺍﺗﺴﺎﺏ‬- ‫ﻣﺘﻮﻓﺮ ﻣﻠﺨﺼﺎﺕ ﻭﻣﻠﻔﺎﺕ ﻣﻔﻴﺪﻩ ﻟﺠﻤﻴﻊ ﻣﻮﺍﺩ ﺍﻟﺠﺎﻣﻌﺔ ﺍﻟﻌﺮﺑﻴﺔ ﺍﻟﻤﻔﺘﻮﺣﺔ ﻣﺠﺎﻧﻴﺔ‬

Question One (25 Marks) (Expected time: 40-45 min)

A. What is meant by Quality? (9 marks)

quality:
quality organizational culture, there will be a commitment to satisfying
the customer. The quality is defined as the extent to which the final

‫ﻣﺤ‬
product sufficient meets the customer’s requirements
Ideally, an organization should also be working on supplying more than
the customer wanted to insure repeated orders

‫ﻤﺪ‬
B. There are many ways in which we can think about an organizational
performance and these vary according to those who concerns we are
considering. One way our view of performance is through the four Es.
‫ﺍﻟ‬
List and explain them. (16 marks)

The four E’s:


‫ﺮ‬

Effectiveness: is the extent to which an organization achieves its


‫ﻣﻀ‬

goals
Efficiency: describes how well an organization transforms inputs
into outputs.
‫ﺎﻥ‬

An organization becomes more efficient as it produces more or


better outputs
for the same inputs
Economy: describes how cheaply the inputs can be purchased.
Economy is
important when managers are constrained by fixed budgets

Ethics: is the extent to which the behavior of an organization and


its members are acceptable
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Question Two (25 Marks) (Expected time: 40-45 min)

Define the following concepts:

A. An organizational vision (5 marks) B. STEEP Model (5 marks) C. A


Planned Strategy (5 marks) D. Push strategy (5 marks) E. Pull
strategy (5 marks)

‫ﻣﺤ‬
organizational vision: is a framework that includes the guiding
philosophy, core values, beliefs and purposes from which the mission
statement is developed

‫ﻤﺪ‬
STEEP Model: It helps you construct a long-term forecast for your
unit, your organization, and for yourself

A planned strategy: involves a formal, rational, process of strategic


choices.
‫ﺍﻟ‬
Pull strategy: customers and distributors are pulled toward the
branded product
‫ﺮ‬

Push strategy: promotional activities aim to push the product to the


‫ﻣﻀ‬

consumer
‫ﺎﻥ‬

Question Three (25 Marks) (Expected time: 40-45 min)

A) A company is manufacturing product X and the selling


price is $500, while the variable cost for each unit is
‫ ﻣﺤﻤﺪ ﺍﻟﺮﻣﻀﺎﻥ‬- 65065026‫ ﺗﻮﺍﺻﻠﻮﺍ ﻣﻌﻨﺎ ﻭﺍﺗﺴﺎﺏ‬- ‫ﻣﺘﻮﻓﺮ ﻣﻠﺨﺼﺎﺕ ﻭﻣﻠﻔﺎﺕ ﻣﻔﻴﺪﻩ ﻟﺠﻤﻴﻊ ﻣﻮﺍﺩ ﺍﻟﺠﺎﻣﻌﺔ ﺍﻟﻌﺮﺑﻴﺔ ﺍﻟﻤﻔﺘﻮﺣﺔ ﻣﺠﺎﻧﻴﺔ‬

$200, meanwhile the fixed cost of the operation will be


$15,000. Calculate the break-even in units. (Write down
the formulas used). (13 marks)

Break-even= fixed cost / contribution per unit

contribution per unit = selling price - variable cost

‫ﻣﺤ‬
contribution per unit = 500 – 200 = 300$

Break-even = 15,000 / 300 =50$

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B) Explain the different types of costs with examples. (12 marks)

Fixed Cost: costs are not affected by changes of

an organization’s activity (i.e. Rent).


‫ﺍﻟ‬
Variable cost: some costs increase or decrease

as the level of activity rises or falls (i.e. Tel charges).


‫ﺮ‬

Direct cost: sometimes it is possible to attach or attribute a cost to


‫ﻣﻀ‬

particular activity (i.e.manufacturing supplies cost)

Indirect cost: not all costs can be attributed to particular tasks


(i.e.Supervision salaries )
‫ﺎﻥ‬

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