State three problems which may arise from the change in capacity level.
【参考答案及解析】
Three problems which may arise from the change in capacity level are as follows. (i) There is likely to be a requirement for additional cash for working capital, for example inventory levels and debtors will probably increase. This additional cash may not be available. (ii) It will probably be necessary to recruit more direct labour. The activities involved in advertising, interviewing and training may lead to increased costs. (iii) It may be necessary to reduce the selling price to sell the increased volume. This could have an adverse effect on profits.
Three problems which may arise from the change in capacity level are as follows. (i) There is likely to be a requirement for additional cash for working capital, for example inventory levels and debtors will probably increase. This additional cash may not be available. (ii) It will probably be necessary to recruit more direct labour. The activities involved in advertising, interviewing and training may lead to increased costs. (iii) It may be necessary to reduce the selling price to sell the increased volume. This could have an adverse effect on profits.