Business Studies · May / June 2022 · Paper 11 · Question 2

CTF is a public limited company. It manufactures beds using batch production. The Operations Director is using break-even analysis to calculate the margin of safety for children’s beds. An extract from CTF’s output data is shown in Table 2.1. The Operations Director wants to know how an increase in inflation might affect CTF. She knows there are many environmental pressures that a manufacturing business could respond to. Table 2.1 Extract from CTF’s output data (children’s beds per month) Break-even output 14000 Current level of output 18000 Maximum factory output 25000

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