21.   Spinks Ltd produce three products, A, B and C.

22.   We will assume that fixed costs are unavoidable.

23.   Fixed costs are unavoidable and are therefore irrelevant in the decision.

24.   It follows in the decision regarding the optimal production plan fixed costs are irrelevant and should therefore be ignored.

25.   By this means the organisation tries to adapt to peaks and troughs in demand without taking on the burden of high fixed labour costs.

26.   Right again, horticulture is another enterprise where fixed costs only represent a quite small proportion of total costs.

27.   That means that there will be less fixed costs.

28.   We are reducing the fixed cost element, not the pupil element.

29.   The fixed cost provision is not the major part of the funding of the sixth form, there are other parts of it.

30.   And a big company can spread fixed costs, like bookkeeping and administration, over a larger number of stores or factories than a small company.