Burnett manufactures a range of sports shoes. The Operations Director is planning to increase the scale of production at its factory. She hopes it could lead to more than one economy of scale. The extra output would allow Burnett to export its shoes for the first time.
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25 Identify and explain two ways in which break-even charts can be useful to the Operations Director of Burnett. [6]
Possible KN Points:
• Shows the expected level of profit / loss at different levels of output
• Shows the margin of safety
• Helps planning
• Able to see what will happen to the break-even point if costs or prices change