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Finance practice questions

Practise mixed syllabus-aligned questions for Finance. Aligned to OCR Gcse Business.

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Question 41 of 123

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a. Calculate A small business, 'Sweet Treats Bakery', makes cupcakes. Each cupcake sells for £2.50. The variable cost per cupcake is £0.70. The bakery's total fixed costs are £900 per month. Calculate the break-even point in units for Sweet Treats Bakery. Show your working. [3 marks] b. Explain Sweet Treats Bakery currently sells 650 cupcakes per month. Explain what the 'margin of safety' is and calculate the bakery's margin of safety in units. [3 marks] c. Evaluate The owner of Sweet Treats Bakery is considering two options to increase profitability: either increasing the selling price of each cupcake to £3.00 or reducing the variable cost per cupcake to £0.50. Evaluate which option would be more beneficial for the bakery, assuming current sales remain at 650 units per month. Justify your answer. [6 marks]

Finance questions | OCR GCSE Business | ExamCompanion