A-Level Business: Capacity, Unit Costs and a Supermarket Contract

Students work out capacity utilisation, unit cost and labour productivity for a bakery, then decide whether to take a supermarket contract priced below its unit cost.

What students do

• Calculate capacity utilisation, unit cost, labour productivity and profit for a bakery as it is today
• Explain why a contract price below unit cost can still add profit
• Compare two responses to the offer: 500 contract loaves in spare capacity, or all 800 with a second shift that adds fixed costs
• Test the risk that regular customers switch, then write a short recommendation that names one risk or difficulty

What the teacher gets

• A lesson plan for about 55 minutes of tasks, with a shorter 45-minute version. Allow longer in the timetable for handing out and feedback
• Worked answers for every question and a note on the assumptions behind the figures
• Indicative guidance for the written answer. It is not an exam board mark scheme and carries no marks or grades
• Editable Word versions of both files, so you can change the business or the figures

Specification

AQA A-level Business 7132, section 3.4 Operational management: calculating labour productivity, unit costs, capacity and capacity utilisation, and using capacity efficiently. Checked against the AQA specification, Version 2.0, 14 June 2023. This lesson is for classes taking 7132 exams in 2027. It is not written for the new 7138 specification. The bakery and every figure are fictional and the questions are original. This is not an AQA resource, and the lesson has not yet been tested in a classroom.