GHT is a public limited company. It produces steel products including gates and garage doors. GHT has a flat organisational structure and a short chain of command. GHT has many stakeholder groups including 600 employees. The Managing Director is considering introducing job rotation to improve employee motivation. He has also been analysing some financial data. An extract is shown in Table 3.1. Table 3.1 Extract of revenue and cost data for one of GHT's products (product X) Units sold in 2020 30 000 Price per unit $100 Variable costs per unit $60 Fixed costs $900 000 Break even output (units) 22 500

Mark scheme

Marking points from the official mark scheme (May/June 2021). The mark or mark type is shown in brackets.

1. [2] Costs that do not change with the level of output/sales
2. [2] Costs that do not vary in the short run with the number of items sold or produced.
3. [1] Partial definition e.g. costs that do not change
4. [2] Correct answer: 7500 (units)
5. [1] Correct method but incorrect answer: e.g. Current output – breakeven output
6. [1] OR 30000-22500
7. [1] Communication is quicker / communication is more accurate / quicker decision-making [k] within the public limited company [app]
8. [1] Easier to delegate tasks / more delegation [k] to its 600 employees [app]
9. [1] Workers feel more motivated [k]
10. [1] Lower costs as fewer managers/supervisors needed [k]
11. [1] (As work more varied) fewer workers might leave [k] from its 600 employees [app] leading to lower recruitment costs [an]
12. [1] Business has a more flexible / skilled workforce / multiskilling [k] leading to higher productivity / higher output [an]
13. [1] Easier to cover / replace others when someone is absent [k] so may be able to meet an order on time [an]
14. [1] Can help business identify where employees work best [k]
15. [1] Increased training needed [k] increasing costs/expenses [an] so may increase its break-even output above 22 500 [app]
16. [1] Workers may not be familiar with each task / less specialist in task / not good at all tasks [k] lowering quality / increase waste / leads to mistakes [an] increasing variable cost above $60 [app]
17. [1] Takes time to learn different tasks / switch between jobs [k]
18. [k] Provide finance / invest money / capital in business [an] which can help the business expand / buy more equipment / increase output
19. [k] Influence the aims of the business
20. [k] Have the power to vote out the directors
21. [k] They have little / no influence over day-to-day decisions
22. [k] Customers [an] as they buy the products and if ignores their needs the business will lose sales/revenue
23. [k] Directors/managers [an] are responsible for day-to-day decision-making
24. [k] Employees [an] make the products so if they become demotivated quality may fall
25. [k] Suppliers [an] provide materials/inventory
26. [k] Local community [an] provide the workers
27. [k] Government [an] provide the legal framework in which the business operates
28. [k] Bank [an] provide finance/loans
29. [eval] Shareholders are important as they invest money in the business [k] which can help the business expand [an]. However, once the business is established, they have little / no influence over day-to-day decisions. Customers [k] matter as they buy the products [an]. While shareholders provide important finance, without customers even a limited company cannot generate income [eval] and without this cannot cover its costs or make a profit, so the customer is probably the most important stakeholder. [eval]