Category: Business Studies

Break even chart assumes that goods are sold Fixed costs may change Lines are not always straight

Classification of costs Fixed costs The costs which have to be paid whether anything is produced or not Variable costs The costs which have to be paid only if something is produced Direct cost Costs which can directly be associated to a product Indirect cost Costs which cannot be directly associated to a product

Break-even chart shows the level of sales a business should achieve in order to break-even or survive

A method of production usually used by the Japanese Lean production is method by which the employees strive to solve the problems as they arise

Advantages –       Goods are produced in bulk –       Goods are produced cheaply –       Time is saved Disadvantages –       High set up costs –       Workers do not feel motivated

Flow production is done to fulfill large demands Production is done in a flow without being stopped Machines produce the products Costs are kept low as the products are produced in bulk

Advantages and Disadvantages of Batch production Advantages Less boredom for employees because they are working on more than one product Business can make and offer a variety of products Disadvantages High storage costs Time is wasted