FBW manufactures watches using job production. It employs 5 full-time production employees. Each worker is offered regular training. Last year FBW sold 600 watches. The Managing Director plans to use break-even analysis to help decide whether to increase the price of its products. FBW's current break-even chart is shown in Fig. 1.1. [Figure 1.1: Break-even chart for FBW's watches, showing total revenue, total costs, and fixed costs against number of watches. Fixed costs are $20,000. Break-even point is at 400 watches and $60,000 revenue/costs.]

1. (a)Identify two reasons why a business might offer training to its employees. Reason 1: Reason 2:[2]
2. (b)Calculate the following values using Fig. 1.1: Break-even output: Break-even revenue:[2]
3. (c)Outline two possible effects on FBW's break-even chart if the prices of its products are increased. Effect 1: Effect 2:[4]
4. (d)Explain two benefits to FBW of having full-time employees. Benefit 1: Explanation: Benefit 2: Explanation:[6]
5. (e)Do you think job production is the best method of production for a small business to use? Justify your answer.[6]

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