Business Studies · May / June 2025 · Paper 12 · Question 4

MHL manufactures tyres for large vehicles. It has factories in 6 countries. The business creates external costs when producing its products. Good communication with MHL’s suppliers is important. The Managing Director knows globalisation provides many opportunities for MHL. She is reviewing data for one of MHL’s factories as she wants to reduce the average cost of the tyres. An extract from this data is shown in Table 4.1. Table 4.1 Data for one of MHL’s factories Output per month (units) 200000 Fixed costs per month $500000 Variable cost per unit $25

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