Entrepreneurship, Costing and Occupational Safety
What the exam tests
This domain tests small-business planning, garment costing, break-even analysis and workplace safety. Expect questions on cost sheets, fixed and variable costs, pricing and hazard control.
Core rules and concepts
- A business plan states the product, customer, competition, operations, marketing and finance. A cost sheet separates material, labour and overhead.
- Fixed costs do not change with output, such as rent and salaries. Variable costs change with output, such as fabric and thread.
- Break-even point in units = fixed costs ÷ (selling price per unit - variable cost per unit). Contribution per unit is selling price minus variable cost.
- Include waste, sampling, transport, depreciation, interest and owner remuneration; otherwise the price is understated.
- Safety controls include machine guarding, electrical earthing, fire extinguishers, ventilation, chemical storage, ergonomic workstations and PPE. The Factories Act 1948 and workplace rules guide basic compliance.
Worked example
Fixed costs are ₹80,000 per month. A garment sells for ₹600 and variable cost is ₹350. Contribution is ₹600 - ₹350 = ₹250. Break-even = 80,000 ÷ 250 = 320 garments per month. If expected sales are only 280 garments, the business makes a loss of 40 × ₹250 = ₹10,000 contribution shortfall. The reasoning is that every unit below break-even fails to cover fixed costs.
Traps that cost marks
Forgetting owner wages, mixing personal and business cash, ignoring depreciation, and bypassing machine guards or electrical safety are serious errors.