Business Studies · Oct / Nov 2016 · Paper 11 · Question 4

DCP makes a range of high quality industrial paints. It sells direct to 6 large business customers which are located in different countries. DCP charges a price of $0.35 per litre. It operates in a competitive market. The Operations manager has been looking at DCP's costs as shown in Table 2. He wants to increase profit but he does not want to buy cheaper materials. Table 2: Output and cost information for DCP per week Output (litres) 1500000 Total fixed costs ($) 350000 Total material costs ($) 60000 Total labour costs ($) 40000

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