IB Business Management HL 6.1.13 Contribution Question Bank
Practise IB Business Management HL 6.1.13 by applying contribution concepts to exam-style questions.
- Syllabus
- First assessment 2024
- Course
- Business management HL
- Level
- HL
Practise IB Business Management HL 6.1.13 by applying contribution concepts to exam-style questions.
Jill Anderson
Jill Anderson operates a restaurant. Although Jill's meals are viewed as being excellent quality, sales are slowing. Jill is considering replacing existing meals with gluten-free meals. The following financial and forecast information is for the month of May 2018. Jill's restaurant can only produce either existing or gluten-free meals.

Table 1: Existing meals

Table 2: Estimated costs and price if Jill produces the gluten-free meals
A local gluten-free manufacturer, which is not part of Jill's existing supply chain, has offered to supply already prepared gluten-free meals at $8 per meal. Jill is unsure whether to make or buy the gluten-free meals.
Calculate:
the total profit or loss on existing meals for May 2018 (show all your working);
TR-TC=profit
$8×800−[$2400+$5×800]$6400−[$2400+4000]$6400−$6400=0
Accept any other method of working.
Candidates are not expected to set out their answer in this manner.
Award [1] for a correct answer with working. Candidates do not need to state that Jill is breaking even. (As the question asks for working)
the forecast profit or loss if Jill decides to make and sell gluten-free meals (show all your working);
Contribution =14-10=4 dollars per meal.
Total contribution =1200×4=4800 dollars.
Total forecast profit =4800-(2400+400)=2000 dollars.
OR:
Profit = TR − TC
=(14×1200)−(2800+1200×10)=16800−14800=2000 dollars.
Award [1] if there is one error in calculation or the correct answer is given without working.
Award [2] for the correct answer and clear, suitable working.