MLC makes motorcycles. The Managing Director has been analysing MLC's costs. An extract of this information is shown in Table 2.1. To reduce average costs, MLC plans to close its factory and relocate production to another country. Only 50 of the existing employees will be offered jobs at the new location. The trade union has been informed. All the new employees will be given either on-the-job training or off-the-job training. This planned relocation will have an impact on MLC's income statement. [Table 2.1] Cost and other information for MLC's current factory (2019) | Total output (units) | 3000 | | Total cost | $1200000 | | Number of employees | 200 |

Mark scheme

Marking points from the official mark scheme (May/June 2020). The mark or mark type is shown in brackets.

1. [2] Group of workers who join together to ensure their interests/rights are protected
2. [2] Organisation which represents the workers and fights for improvements to pay and conditions
3. [1] Partial definition e.g. A group who fight for workers' rights
4. [2] 400
5. [1] 1 200 000/3000 OR total cost / total output
6. [1] Revenue
7. [1] Cost of sales
8. [1] Gross Profit
9. [1] Profit (for the year)
10. [1] Retained Profit
11. [1] Expenses
12. [3] Access to suitable employees/not easy to find employees [k] as at new site will need 150 new employees [app] increasing recruitment/training costs [an]
13. [3] Access to/cost of suitable land [k] as will need a big space[an] to make motorcycles [app]
14. [3] Different legal controls/standards [k] in the new factory [app] which may mean have to change how/where operate [an]
15. [3] Could be further away from market/suppliers/need to find new suppliers [k] which increases transport costs [an]
16. [3] Communication problems [k] as may need to learn a new language [an] so takes longer to complete on-the-job training [app]
17. [1] Not necessarily tailored to individual business [k]
18. [1] Have to pay more/high cost for specialists [k]
19. [1] which increases costs [an]
20. [1] Skills might not be available in the business [k]
21. [1] so benefit from new techniques/ideas [an]
22. [1] Allows for mistakes to be made when learning [k]
23. [1] so less likely to waste resources when working/lower risk of damaging business reputation [an]
24. [1] Can reinforce errors/bad habits of trainer [k]
25. [1] reducing sales/damage reputation [an]
26. [1] Fewer new ideas/skills will be taught [k]
27. [1] Control what is taught/employees learn exact way business wants things done [k]
28. [1] so workers only learn skills needed [an]
29. [1] Employees can carry on working [k]
30. [1] so some output is still produced [an]
31. [1] Cheaper (than off-the-job) [k]
32. [2] No, as it depends what the training is for - if using new techniques/machines the business may not have a suitable person to train others so on-the-job is not an option so it would have no choice and would have to use off-the-job training. [eval] [eval]