RefillRush (RR) is a small social enterprise that sells environmentally friendly household cleaning liquids from refill stalls at weekend markets. Customers bring their own containers and pay for each refill. RR’s direct variable costs include the cleaning liquid bought in bulk, paper labels and card payment fees. RR also pays fixed costs such as stall rental, insurance and the founder’s monthly salary.

RR is considering installing self-service refill machines in two large apartment blocks. The machines would require a monthly lease and software fee, but would reduce the need for staff at markets. RR would earn revenue from monthly subscriptions paid by residents and a small fee from the apartment managers for reducing plastic waste. However, the machines may need maintenance and some market customers enjoy the personal advice given by RR’s staff.

StageLoop (SL) is a not-for-profit theatre costume organization. It hires costumes to schools and amateur theatre groups. Most of its revenue comes from costume hire during two busy performance seasons each year. SL’s fixed costs include rent for its storage unit, insurance and the salary of one full-time administrator. Its variable costs include cleaning, minor repairs and packaging for each costume hired.

The manager wants to reduce SL’s dependence on seasonal costume hire by adding two new revenue streams: online costume-making workshops and paid access to digital sewing patterns. The workshops would require a subscription to video-conferencing software and payments to freelance tutors. Digital patterns would require an initial design cost but very low costs for each extra download. Some trustees are concerned that the new activities could distract SL from maintaining its costume collection.

ReFill Home (RH) supplies eco-friendly cleaning liquids in reusable 5-litre containers to small local shops. RH’s main revenue stream is wholesale sales to shops. The owner, Mina, is considering adding a mobile refill van that would visit weekend markets and allow customers to refill their own containers by the litre.

Mina believes that the mobile refill van would support RH’s environmental mission and create a new revenue stream. However, some wholesale customers may buy less because individual consumers would purchase directly from RH. Demand at weekend markets is uncertain and may depend on weather and local events.

Selected forecast annual data are shown below. All figures are in CU.

ByteBox Repairs (BB) repairs laptops for individual customers in a city centre workshop. Most of BB’s income currently comes from one revenue stream: repair fees. The owner, Arjun, is considering adding two new revenue streams: annual maintenance contracts for schools and sales of refurbished accessories.

Arjun believes that the new revenue streams would make BB less dependent on unpredictable walk-in repair demand. However, the new activities would require additional fixed costs and may reduce the number of individual repairs completed because technicians would spend time visiting schools.

Selected annual data are shown below. All monetary figures are in CU.

ThermoBox (TB) designs insulated meal containers for office workers. TB currently manufactures the containers in its own small workshop. Its fixed costs include workshop rent, equipment leasing and the salary of a production supervisor. Its direct variable costs include recycled plastic, insulation material and packaging for each container. TB sells mainly through its website, but website sales have become unpredictable.

A specialist manufacturer has offered to produce the containers for TB at a higher variable cost per unit. If TB accepts the offer, it could close the workshop and reduce several fixed costs, but it would need to pay for quality inspections and delivery from the manufacturer. TB is also considering adding two revenue streams: a corporate subscription service for companies that provide containers to employees, and rental income from letting part of its current workshop to a local repair business if it does not close the site completely.

Precision Drone Parts (PDP) manufactures components for agricultural drones. PDP currently has two revenue streams: rotor housings and camera brackets. Its factory is operating at full machine-hour capacity. A large retailer has offered PDP a one-year private-label contract to manufacture sensor mounts. The sensor mounts would not carry the PDP brand name.

PDP’s operations manager has calculated that if the contract is accepted, PDP must reduce production of one of its existing products to free machine hours. The finance director suggests reducing rotor housing output because it has the lower contribution per machine hour.

Selected annual data are shown below. All figures are in CU.

The existing annual fixed costs for PDP are CU 170 000 in total. This is one unavoidable, factory-wide cost that remains unchanged whether or not the contract is accepted; the CU 170 000 shown in each column is not a separate cost for each product. Only the additional CU 22 000 quality-testing cost is incremental.

The factory’s current annual machine-hour capacity is fully used.

ReThread Works (RTW)

Read the resources and answer the questions that follow.

Resource 1 — Background of the social enterprise

ReThread Works (RTW) is a social enterprise that trains refugees and long-term unemployed people to make school bags and laptop sleeves from textile waste. RTW sells directly at weekend markets and through a small website. Its social objectives are to reduce landfill waste and to provide paid work and accredited sewing skills. RTW reinvests any surplus into training places.

RTW has grown quickly, but the founder, Amina, is concerned that the organization does not classify its costs clearly. RTW records all spending as “production expenses”, even though some costs are fixed, some are variable, some are direct to a product line and some are indirect overheads. Amina is considering whether RTW should stop using weekend markets and focus on two new revenue streams: monthly online subscriptions for limited-edition bags and contracts to supply branded laptop sleeves to ethical companies.

Resource 2 — Selected monthly costs and revenues for RTW, 2025

Resource 3 — Social-media statistic

RTW’s short videos about “turning waste into wages” received 480000 views in three months. However, only 2.5% of viewers clicked through to RTW’s website.

Resource 4 — Quotation from Amina, founder of RTW

“Corporate contracts could give us steady revenue, but I worry that strict delivery deadlines will push us to use cheaper new materials instead of waste textiles. That would damage our mission.”

Resource 5 — Funding change

A local charity has told RTW that its annual training grant will fall by 40% next year. RTW must therefore increase earned revenue or reduce costs while maintaining its social objectives.

SolarScoot Share (SSS)

Read the resources and answer the questions that follow.

Resource 1 — Background of the social enterprise

SolarScoot Share (SSS) is a social enterprise that rents solar-charged electric scooters to residents in low-income urban areas. Its mission is to provide affordable, low-carbon transport for people who cannot easily access buses or trains. SSS currently operates in one city with 300 scooters.

SSS charges a low pay-per-ride price and receives a small municipal subsidy for each ride taken by registered low-income users. It also earns advertising revenue from local businesses that place small digital adverts in the SSS app. SSS wants to expand into two neighbouring cities, but the management team is concerned that total revenue is growing more slowly than total costs. The team is considering a plan to introduce monthly subscriptions for frequent users while keeping a discounted pay-per-ride option for low-income residents.

Resource 2 — Selected monthly data for SSS

Resource 3 — Community survey

In a survey of 900 users, 68% said SSS was their cheapest way to reach work or education. However, 54% said they would use SSS less often if prices increased above CU1 per ride.

Resource 4 — Quotation from the operations manager

“Subscriptions could improve predictable revenue, but they may benefit regular commuters more than occasional users. We must avoid becoming a transport service only for people who can pay in advance.”

Resource 5 — Expansion opportunity

A neighbouring city has offered SSS free parking spaces for scooters for one year but no subsidy. A second city has offered a subsidy per ride, but only if SSS provides evidence that at least 60% of rides are taken by low-income users.

NourishLink Kitchens (NLK)

Read the resources and answer the questions that follow.

Resource 1 — Background of the social enterprise

NourishLink Kitchens (NLK) is a social enterprise that prepares nutritious low-cost lunches for schoolchildren using surplus food from farms and supermarkets. NLK’s mission is to reduce food waste and improve children’s health. Schools pay a low price per lunch, and families in hardship receive free meals funded by donations.

NLK’s kitchen is near full capacity. The founder, Mateo, has been offered a contract to provide premium buffet lunches for local companies. The corporate catering revenue could help fund free school meals, but it would require new packaging, stricter delivery times and some evening work. NLK is also considering selling branded recipe boxes online as an additional revenue stream. Mateo wants clearer reporting because last year’s total revenue included a one-off sale of an old delivery van.

Resource 2 — Selected data for a typical month

Resource 3 — Revenue reporting issue

Last year, NLK reported total revenue growth of 18%. If the one-off CU16000 sale of an old delivery van is excluded, revenue from normal activities increased by only 4%.

Resource 4 — Quotation from a school principal

“NLK meals are affordable and reliable. If corporate catering causes late school deliveries or higher prices, families will lose trust quickly.”

Resource 5 — Social-media statistic

A recipe video posted by NLK had 310000 views and 9200 users signed up to receive updates about recipe boxes. NLK has no experience of online fulfilment or customer returns.