Business Management and Introduction to Business Marketing QLS Level 3 Quiz Exam

To solve the problem, we need to calculate the total cost of producing a certain number of units based on the given cost structure. The total cost \( C \) can be expressed as: $$ C = F + V \cdot Q $$ where: – \( F \) is the fixed cost, – \( V \) is the variable cost per unit, – \( Q \) is the quantity of units produced. Given: – Fixed cost \( F = 5000 \) – Variable cost per unit \( V = 20 \) – Quantity \( Q = 300 \) Substituting the values into the equation: $$ C = 5000 + 20 \cdot 300 $$ Calculating the variable cost: $$ 20 \cdot 300 = 6000 $$ Now, substituting back into the total cost equation: $$ C = 5000 + 6000 = 11000 $$ Thus, the total cost of producing 300 units is \( C = 11000 \). In business management, understanding the cost structure is crucial for decision-making. The fixed costs remain constant regardless of the production level, while variable costs fluctuate with the quantity produced. This distinction helps managers in budgeting and forecasting, ensuring that they can maintain profitability while scaling operations. By analyzing these costs, businesses can determine the break-even point and set appropriate pricing strategies to cover costs and achieve desired profit margins.

To understand the impact of globalization on business operations, we can analyze a hypothetical scenario where a company, “Tech Innovations,” expands its operations internationally. The company initially operates in its home country, generating an annual revenue of $5 million. After entering a new market in Asia, it experiences a 20% increase in revenue due to access to a larger customer base and reduced production costs. The calculation for the new revenue is as follows: Initial Revenue = $5,000,000 Increase in Revenue = 20% of $5,000,000 = 0.20 * $5,000,000 = $1,000,000 New Revenue = Initial Revenue + Increase in Revenue = $5,000,000 + $1,000,000 = $6,000,000 Thus, the new revenue after globalization is $6,000,000. This scenario illustrates how globalization can enhance business operations by providing access to new markets and cost efficiencies. The implications of this increase are significant. Globalization allows businesses to diversify their markets, reducing dependency on a single economy. It also enables companies to leverage different economic conditions, such as lower labor costs in emerging markets, which can lead to higher profit margins. However, it also introduces challenges such as cultural differences, regulatory compliance, and increased competition. Companies must adapt their strategies to navigate these complexities effectively.

In a group project scenario, effective collaboration and presentation skills are crucial for success. Let’s consider a group of four students working on a marketing presentation. Each student is responsible for a different section of the project, and they must present their findings cohesively. The group meets three times before the presentation, dedicating 2 hours for each meeting. During these meetings, they discuss their individual sections, provide feedback, and practice their presentation. The total time spent on collaborative learning is calculated as follows: Total time spent = Number of meetings × Duration of each meeting Total time spent = 3 meetings × 2 hours/meeting = 6 hours Now, if each student spends an additional 1 hour preparing their individual sections, the total time spent by the group on the project becomes: Total individual preparation time = Number of students × Time spent per student Total individual preparation time = 4 students × 1 hour/student = 4 hours Thus, the overall time spent on the project, combining both collaborative and individual efforts, is: Overall time spent = Total time spent on collaboration + Total individual preparation time Overall time spent = 6 hours + 4 hours = 10 hours Therefore, the total time the group dedicated to the project is 10 hours.

To determine the impact of tariffs on the price of imported goods, we first need to understand how tariffs are calculated. Let’s assume a product has an original price of £100 and a tariff rate of 20%. The tariff amount would be calculated as follows: Tariff Amount = Original Price × Tariff Rate Tariff Amount = £100 × 0.20 = £20 Now, to find the total cost of the imported product after the tariff is applied, we add the tariff amount to the original price: Total Cost = Original Price + Tariff Amount Total Cost = £100 + £20 = £120 Thus, the final price of the imported product after the tariff is applied is £120. This calculation illustrates how tariffs can significantly increase the cost of imported goods, affecting consumer choices and market dynamics. In the context of trade regulations, tariffs are imposed by governments to protect domestic industries from foreign competition. They can lead to higher prices for consumers and may also influence trade agreements between countries. Understanding the implications of tariffs is crucial for businesses engaged in international trade, as it affects pricing strategies, market entry decisions, and overall competitiveness.

To determine the most effective organizational structure for a company, we need to analyze the characteristics of different structures and how they align with the company’s goals. In this scenario, we consider a company that values innovation and rapid response to market changes. A flat organizational structure, which minimizes hierarchical levels, encourages open communication and faster decision-making. This structure is particularly beneficial in dynamic industries where adaptability is crucial. In contrast, a traditional hierarchical structure may slow down the decision-making process due to multiple layers of management. Therefore, the most suitable organizational structure for a company focused on innovation and agility is a flat structure.

To determine the effectiveness of a company’s strategic management in aligning its vision, mission, goals, and objectives, we can analyze a hypothetical scenario. Let’s say a company has a vision to be the leading provider of eco-friendly products. Its mission is to innovate sustainable solutions that enhance the quality of life. The company sets a goal to increase market share by 20% over the next three years and establishes specific objectives, such as launching three new products annually and increasing customer engagement by 30% through social media campaigns. To evaluate the alignment, we can assess whether the goals and objectives directly support the vision and mission. The goal of increasing market share aligns with the vision of being a leader, while the objectives of product innovation and customer engagement support the mission of enhancing quality of life through sustainability. Thus, the strategic management is effective if all elements are interconnected and drive the company towards its overarching vision.

To determine the total cost of a marketing campaign, we need to consider both fixed and variable costs. Let’s assume the fixed costs for the campaign are £5,000, which includes salaries for the marketing team and overhead expenses. The variable costs, which depend on the number of units sold, are £20 per unit. If the campaign is expected to sell 300 units, the total variable cost would be calculated as follows: Total Variable Cost = Variable Cost per Unit × Number of Units Sold Total Variable Cost = £20 × 300 = £6,000 Now, we add the fixed costs to the total variable costs to find the total cost of the marketing campaign: Total Cost = Fixed Costs + Total Variable Costs Total Cost = £5,000 + £6,000 = £11,000 Thus, the total cost of the marketing campaign is £11,000. This calculation illustrates the importance of understanding both fixed and variable costs in business management and marketing. Fixed costs remain constant regardless of sales volume, while variable costs fluctuate based on production or sales levels. This distinction is crucial for budgeting and financial forecasting, as it helps businesses determine the break-even point and assess the profitability of marketing initiatives.

To determine the most effective method for collecting data in a market research scenario, we must analyze the context and objectives of the research. In this case, the company aims to understand consumer preferences for a new product line. The options for data collection include surveys, focus groups, observational studies, and secondary data analysis. Surveys are effective for gathering quantitative data from a large audience, allowing for statistical analysis. Focus groups provide qualitative insights through discussions, revealing deeper consumer motivations. Observational studies allow researchers to see how consumers interact with products in real-time, while secondary data analysis involves reviewing existing data sources. Given the need for both breadth and depth of understanding consumer preferences, a mixed-method approach that combines surveys for quantitative data and focus groups for qualitative insights would be most effective. Therefore, the best answer is option a) Mixed-method approach.

To analyze the impact of external environmental factors on a business, we consider the PESTLE framework, which includes Political, Economic, Social, Technological, Legal, and Environmental factors. Each of these factors can significantly influence business operations and strategic decisions. For instance, if a government introduces new regulations (Political), it may require businesses to adapt their compliance strategies. Economic factors such as inflation rates can affect consumer purchasing power, thereby impacting sales. Social trends can shift consumer preferences, necessitating changes in marketing strategies. Technological advancements can lead to new product development or operational efficiencies. Legal changes can impose new liabilities or alter competitive dynamics. Lastly, environmental factors, such as climate change, can influence corporate social responsibility initiatives and operational practices. Understanding these factors allows businesses to anticipate challenges and seize opportunities, ultimately leading to more informed strategic planning.

To determine the importance of financial management objectives, we can analyze the impact of effective financial management on a company’s profitability and sustainability. Financial management objectives typically include maximizing shareholder wealth, ensuring liquidity, and maintaining financial stability. For instance, if a company has a net income of £200,000 and total assets of £1,000,000, the return on assets (ROA) can be calculated as follows: ROA = (Net Income / Total Assets) * 100 ROA = (£200,000 / £1,000,000) * 100 ROA = 20% This indicates that the company generates a return of 20% on its assets, which is a strong indicator of effective financial management. The importance of these objectives lies in their ability to guide decision-making, allocate resources efficiently, and ultimately enhance the company’s market position. By focusing on these objectives, businesses can ensure long-term growth and stability, which is crucial in a competitive environment.

To determine the break-even point in units, we first need to understand the fixed and variable costs involved. Let’s assume a company has fixed costs of £20,000 per year. The variable cost per unit is £15, and the selling price per unit is £30. The break-even point (BEP) can be calculated using the formula: BEP (in units) = Fixed Costs / (Selling Price per Unit – Variable Cost per Unit) Substituting the values: BEP = £20,000 / (£30 – £15) BEP = £20,000 / £15 BEP = 1,333.33 units Since we cannot sell a fraction of a unit, we round up to the nearest whole number, which gives us 1,334 units. This calculation shows that the company must sell 1,334 units to cover all its costs. Understanding the break-even point is crucial for businesses as it helps them determine the minimum sales required to avoid losses. It also aids in pricing strategies, cost control, and financial forecasting. By analyzing fixed and variable costs, businesses can make informed decisions about scaling operations, adjusting pricing, and managing resources effectively.

To determine the best approach for resolving a conflict in a team setting, we can analyze the situation using critical thinking and problem-solving skills. The scenario involves a team divided over the direction of a project, with two distinct viewpoints. The first viewpoint advocates for a more innovative approach, while the second emphasizes a traditional method that has proven successful in the past. To resolve this conflict, we can apply a structured problem-solving process: 1. Identify the problem: The team is divided on the project direction. 2. Gather information: Understand the pros and cons of both approaches. 3. Generate alternatives: Consider a compromise that incorporates elements of both viewpoints. 4. Evaluate alternatives: Assess the potential outcomes of each approach. 5. Make a decision: Choose the approach that aligns best with the team’s goals and the project’s requirements. After evaluating the options, the best resolution is to facilitate a discussion that allows team members to express their concerns and suggestions, leading to a collaborative decision. This method not only resolves the conflict but also fosters a sense of ownership and teamwork.

Business management is a multifaceted discipline that encompasses planning, organizing, leading, and controlling an organization’s resources to achieve specific goals efficiently and effectively. The importance of business management lies in its ability to provide a structured approach to achieving organizational objectives, ensuring that resources are utilized optimally, and fostering a productive work environment. Effective business management leads to improved decision-making, enhanced productivity, and better financial performance. It also plays a crucial role in strategic planning, allowing organizations to adapt to changing market conditions and consumer needs. By implementing sound management practices, businesses can mitigate risks, capitalize on opportunities, and maintain a competitive edge in their respective industries. Furthermore, strong management practices contribute to employee satisfaction and retention, as they create a clear framework for roles and responsibilities, promote teamwork, and encourage professional development. In summary, business management is vital for the sustainability and growth of any organization, as it aligns resources with strategic goals and drives overall performance.

To analyze the internal environment of an organization, we must consider its organizational culture, resources, and capabilities. Organizational culture refers to the shared values, beliefs, and practices that shape how members of an organization interact and work together. Resources include both tangible assets (like equipment and finances) and intangible assets (like brand reputation and intellectual property). Capabilities are the skills and competencies that enable an organization to effectively utilize its resources to achieve its goals. In this scenario, we are assessing how these elements interact to influence organizational performance. A strong organizational culture can enhance employee engagement, leading to better utilization of resources and improved capabilities. Conversely, a weak culture may hinder performance, regardless of the resources available. Therefore, understanding the interplay between these factors is crucial for effective management and strategic planning.

In this scenario, we are examining the impact of organizational structure on employee performance and communication. A flat organizational structure typically allows for fewer hierarchical levels, which can lead to improved communication and faster decision-making. In contrast, a hierarchical structure may create barriers to communication due to the multiple layers of management. To analyze the effectiveness of these structures, we consider employee feedback and performance metrics. Assuming a company with a flat structure receives an average employee satisfaction score of 85% and a performance metric of 90% efficiency, while a hierarchical structure scores 70% in satisfaction and 75% in efficiency, we can conclude that the flat structure is more effective. The difference in satisfaction scores (85% – 70% = 15%) and efficiency (90% – 75% = 15%) indicates that the flat structure not only fosters better communication but also enhances overall performance. Thus, the conclusion drawn from this analysis is that a flat organizational structure is generally more beneficial for employee satisfaction and performance compared to a hierarchical structure.

To analyze a company’s position using SWOT analysis, we identify the internal strengths and weaknesses, as well as the external opportunities and threats. For instance, if a company has a strong brand reputation (strength), limited financial resources (weakness), a growing market for its products (opportunity), and intense competition (threat), we can summarize these findings. The strengths and weaknesses are internal factors that the company can control, while opportunities and threats are external factors that the company must navigate. The effectiveness of a SWOT analysis lies in how well the company can leverage its strengths to capitalize on opportunities while mitigating weaknesses and defending against threats. In this scenario, the company should focus on enhancing its financial resources through strategic partnerships or investments to better position itself against competition and seize market growth.

To solve the problem, we first need to calculate the total cost of producing a certain number of units, given the fixed and variable costs. The total cost \( C \) can be expressed as: $$ C = F + V \cdot Q $$ where: – \( F \) is the fixed cost, – \( V \) is the variable cost per unit, – \( Q \) is the quantity of units produced. In this scenario, let’s assume the fixed cost \( F = 5000 \) and the variable cost per unit \( V = 20 \). If the company produces \( Q = 300 \) units, we can substitute these values into the equation: $$ C = 5000 + 20 \cdot 300 $$ Calculating the variable cost: $$ 20 \cdot 300 = 6000 $$ Now, substituting back into the total cost equation: $$ C = 5000 + 6000 = 11000 $$ Thus, the total cost of producing 300 units is \( C = 11000 \). Now, if the company decides to increase production to \( Q = 400 \) units, we can recalculate the total cost: $$ C = 5000 + 20 \cdot 400 $$ Calculating the new variable cost: $$ 20 \cdot 400 = 8000 $$ Substituting back into the total cost equation gives: $$ C = 5000 + 8000 = 13000 $$ The increase in total cost when increasing production from 300 to 400 units is: $$ \Delta C = C_{400} – C_{300} = 13000 – 11000 = 2000 $$ Thus, the increase in total cost is \( 2000 \).

In negotiation, understanding the interests of both parties is crucial for conflict resolution. The first step is to identify the underlying interests rather than just the positions. For example, if two companies are negotiating a partnership, one may prioritize market expansion while the other focuses on cost reduction. By recognizing these interests, negotiators can explore options that satisfy both parties, such as a revenue-sharing model that allows for market growth while minimizing upfront costs. This approach fosters collaboration and leads to a win-win outcome. Effective negotiation strategies also involve active listening, where negotiators paraphrase and summarize what the other party has said to ensure understanding and build rapport. This technique can help in de-escalating conflicts and finding common ground. Ultimately, successful negotiation hinges on the ability to adapt strategies based on the dynamics of the conversation and the interests at stake.

In decision-making, various models can be applied depending on the context and the nature of the decision. The Rational Decision-Making Model involves a systematic process of defining the problem, identifying the criteria, weighing the criteria, generating alternatives, evaluating the alternatives, and finally selecting the best option. The Intuitive Decision-Making Model relies on gut feelings and instincts, often based on past experiences. The Recognition-Primed Decision Model combines elements of both rational and intuitive approaches, allowing decision-makers to recognize patterns and make quick decisions based on their experiences. In a scenario where a manager must decide on a new marketing strategy, they might first analyze data (Rational), then rely on their intuition about what has worked in the past (Intuitive), and finally, they might recognize a familiar pattern that suggests a particular strategy is likely to succeed (Recognition-Primed). Understanding these models helps managers choose the most effective approach based on the situation at hand.

To understand the role of technology in business operations, consider a company that has implemented an integrated software system to manage its supply chain. This system reduces the time taken to process orders from 5 days to 2 days. The company processes an average of 100 orders per day. The time saved per order is 3 days (5 days – 2 days). Therefore, the total time saved per day is calculated as follows: Total time saved per day = Time saved per order × Number of orders processed per day Total time saved per day = 3 days × 100 orders = 300 days This means that the company saves 300 days of processing time every day due to the implementation of technology. This significant reduction in processing time can lead to increased efficiency, reduced operational costs, and improved customer satisfaction. The explanation highlights how technology can streamline operations, allowing businesses to allocate resources more effectively and respond to customer needs more swiftly. By leveraging technology, businesses can enhance their operational capabilities, leading to a competitive advantage in the marketplace.

To determine the total cost of a marketing campaign, we need to consider both fixed and variable costs. Let’s assume the fixed costs for the campaign are £5,000, which includes salaries, rent, and utilities. The variable costs, which depend on the number of advertisements placed, are £200 per advertisement. If the company plans to place 30 advertisements, the total variable cost would be calculated as follows: Variable Cost = Cost per Advertisement × Number of Advertisements Variable Cost = £200 × 30 = £6,000 Now, we add the fixed costs to the total variable costs to find the total cost of the marketing campaign: Total Cost = Fixed Costs + Variable Costs Total Cost = £5,000 + £6,000 = £11,000 Thus, the total cost of the marketing campaign is £11,000. This calculation illustrates the importance of understanding both fixed and variable costs in budgeting for marketing initiatives, as it allows businesses to allocate resources effectively and predict financial outcomes.

To determine the most effective leadership style for a team facing a crisis, we must consider the characteristics of various leadership approaches. In this scenario, a transformational leadership style is often deemed most effective. Transformational leaders inspire and motivate their teams to exceed expectations and embrace change, which is crucial during a crisis. They foster an environment of trust and collaboration, encouraging team members to contribute ideas and solutions. This approach contrasts with transactional leadership, which focuses on structured tasks and rewards, and may not be as effective in dynamic situations. Additionally, autocratic leadership, which involves making decisions unilaterally, can stifle creativity and morale, while laissez-faire leadership may lead to a lack of direction. Therefore, the transformational leadership style is the most suitable for navigating crises, as it empowers teams and promotes resilience.

To determine the best approach for a startup to foster innovation, we must analyze the characteristics of each option. The startup’s goal is to create a culture that encourages new ideas and solutions. 1. **Encouraging Risk-Taking**: This involves creating an environment where employees feel safe to propose unconventional ideas without fear of failure. This is crucial for innovation as it allows for experimentation and learning from mistakes. 2. **Implementing Strict Hierarchies**: This approach typically stifles creativity as it limits communication and the flow of ideas. Employees may feel less empowered to share their thoughts, which can hinder innovation. 3. **Focusing Solely on Profit**: While profitability is essential for sustainability, an exclusive focus on profit can lead to short-term thinking and neglect of innovative processes that may not yield immediate financial returns. 4. **Promoting Collaboration Across Departments**: This encourages diverse perspectives and skills to come together, fostering a more innovative environment. Collaboration can lead to the cross-pollination of ideas, which is vital for creative solutions. After evaluating these options, the most effective strategy for fostering innovation in a startup is to encourage risk-taking and promote collaboration across departments, as both create an environment conducive to new ideas.

To determine the efficiency of a production process, we can use the formula for efficiency, which is defined as (Actual Output / Potential Output) x 100. In this scenario, a factory has a potential output of 1,000 units per day but is currently producing 750 units per day. Calculating the efficiency: Efficiency = (Actual Output / Potential Output) x 100 Efficiency = (750 / 1000) x 100 Efficiency = 0.75 x 100 Efficiency = 75% Thus, the efficiency of the production process is 75%. This calculation illustrates the importance of understanding production efficiency in business management. Efficiency is a critical metric that helps businesses assess how well they are utilizing their resources. A higher efficiency percentage indicates that a company is closer to achieving its maximum potential output, which can lead to increased profitability and competitiveness in the market. Conversely, a lower efficiency percentage may signal issues such as waste, poor management, or equipment malfunctions that need to be addressed to improve overall productivity.

In decision-making, understanding the different models is crucial for effective management. The Rational Decision-Making Model involves a systematic process of defining the problem, identifying the criteria, weighing the criteria, generating alternatives, evaluating the alternatives, and finally choosing the best option. In contrast, the Intuitive Decision-Making Model relies on gut feelings and experiences, often used in situations where time is limited or information is incomplete. The Recognition-Primed Decision Model combines elements of both rational and intuitive approaches, allowing decision-makers to recognize patterns from past experiences and make quick decisions without extensive analysis. For example, if a manager faces a sudden drop in sales, they might use the Rational Model to analyze data and identify the cause, while another manager might rely on intuition based on previous similar experiences. The effectiveness of each model can vary based on the context and the urgency of the decision. Understanding these models helps managers choose the appropriate approach based on the situation, leading to better outcomes.

To determine the most effective e-commerce model for a new online retail business, we need to analyze the advantages and challenges of various models. The B2C (Business to Consumer) model is often favored for online retail due to its direct interaction with consumers, allowing for personalized marketing and customer engagement. In contrast, the B2B (Business to Business) model focuses on transactions between businesses, which can lead to larger order volumes but may require more complex sales processes. The C2C (Consumer to Consumer) model, while popular in platforms like eBay, often lacks the scalability and control that a new business might need. Finally, the C2B (Consumer to Business) model, where consumers offer products or services to businesses, can be innovative but may not provide a stable revenue stream for a new venture. Given these considerations, the B2C model stands out as the most suitable for a new online retail business, balancing direct consumer access with manageable operational challenges.

To determine the break-even point in units, we first need to understand the formula for break-even analysis, which is given by: Break-even Point (in units) = Fixed Costs / (Selling Price per Unit – Variable Cost per Unit) Assuming a company has fixed costs of £50,000, a selling price per unit of £25, and variable costs per unit of £15, we can calculate the break-even point as follows: 1. Fixed Costs = £50,000 2. Selling Price per Unit = £25 3. Variable Cost per Unit = £15 Now, we calculate the contribution margin per unit: Contribution Margin = Selling Price per Unit – Variable Cost per Unit Contribution Margin = £25 – £15 = £10 Now, we can calculate the break-even point: Break-even Point = Fixed Costs / Contribution Margin Break-even Point = £50,000 / £10 = 5,000 units Thus, the break-even point is 5,000 units. In this scenario, understanding the distinction between fixed and variable costs is crucial. Fixed costs remain constant regardless of production levels, while variable costs fluctuate with the volume of goods produced. The break-even analysis helps businesses determine the minimum sales volume needed to avoid losses. This analysis is essential for strategic planning, allowing managers to make informed decisions about pricing, budgeting, and financial forecasting. By knowing the break-even point, a business can set sales targets and evaluate the impact of changes in costs or pricing strategies on profitability.

To determine the importance of information systems in a business context, we can analyze their roles in data management, decision-making, and operational efficiency. Information systems can be categorized into various types, such as Transaction Processing Systems (TPS), Management Information Systems (MIS), Decision Support Systems (DSS), and Executive Information Systems (EIS). Each type serves a unique purpose, contributing to the overall effectiveness of an organization. For instance, a TPS captures and processes data from transactions, while an MIS provides reports for management to make informed decisions. The integration of these systems enhances data accuracy and accessibility, leading to improved decision-making processes. Furthermore, effective data management ensures that information is stored securely and can be retrieved efficiently, which is crucial for maintaining competitive advantage. Therefore, the overall importance of information systems can be summarized as enhancing operational efficiency, supporting strategic decision-making, and ensuring effective data management.

To determine the total cost of a marketing campaign, we need to consider both fixed and variable costs. Let’s assume the fixed costs for the campaign are £5,000, which includes salaries, rent, and equipment. The variable costs are based on the number of units sold, which is £20 per unit. If the campaign is expected to sell 300 units, the variable costs would be calculated as follows: Variable Costs = Cost per Unit × Number of Units Sold Variable Costs = £20 × 300 = £6,000 Now, we add the fixed costs to the variable costs to find the total cost of the campaign: Total Cost = Fixed Costs + Variable Costs Total Cost = £5,000 + £6,000 = £11,000 Thus, the total cost of the marketing campaign is £11,000. In this scenario, understanding the distinction between fixed and variable costs is crucial for effective budgeting and financial planning in business management. Fixed costs remain constant regardless of sales volume, while variable costs fluctuate with production levels. This knowledge allows businesses to make informed decisions about pricing, sales targets, and overall financial strategy.

To determine the optimal production level for a company, we can use the concept of marginal cost (MC) and marginal revenue (MR). The company has fixed costs of £10,000 and variable costs of £5 per unit. The selling price per unit is £20. First, we calculate the total cost (TC) and total revenue (TR) for producing different quantities. The total cost is given by: TC = Fixed Costs + (Variable Cost per Unit × Quantity) TC = £10,000 + (£5 × Quantity) The total revenue is calculated as: TR = Selling Price per Unit × Quantity TR = £20 × Quantity To find the profit, we subtract total costs from total revenue: Profit = TR – TC Profit = (£20 × Quantity) – (£10,000 + (£5 × Quantity)) Setting the profit equation to zero to find the break-even point: 0 = (£20 × Quantity) – (£10,000 + (£5 × Quantity)) 0 = £20Q – £10,000 – £5Q 0 = £15Q – £10,000 15Q = £10,000 Q = £10,000 / £15 Q = 666.67 Since we cannot produce a fraction of a unit, we round up to 667 units. Therefore, the optimal production level to break even is 667 units.