0450_w11_qp_11
A paper of Business Studies, 0450
Questions:
5
Year:
2011
Paper:
1
Variant:
1
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1
For Examiner’s Use Carlos was made redundant from his job in a factory. He used his redundancy money and some of his savings to start a new business. He bought a boat to give trips to tourists on a river near his home. The boat cost him $150 000. Table 1 shows the revenue and cost estimates that Carlos made. Table 1 Revenue per boat trip Variable cost per boat trip Average number of boat trips per week Weekly overhead costs [fixed costs] $80 $30 $500 Carlos wanted his business to give him job security and to give a return on his investment of at least 20% each year. He estimates that annual profits will be $37 500. What is meant by ‘made redundant’? Identify two examples of overhead costs that Carlos might incur. Example 1: Example 2: Using the information given in Table 1, draw a break-even chart for Carlos’ business. Number of boat trips per week Revenue & Costs $ Weekly Break-Even Chart For Examiner’s Use Identify and explain three methods that Carlos could use to promote his new business. Method 1: Explanation: Method 2: Explanation: Method 3: Explanation: Carlos wanted his business to give him job security and a return on capital of at least 20%. Do you think that his business will help him achieve these objectives? Justify your answer.
4. Operations management  →  4.2. Costs, scale of production and break-even analysis
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2
For Examiner’s Use Early Tots makes wooden toys for children. The business uses both primary and secondary market research data to decide what products to make. It has a wide range of toys but some of the products are nearing the end of their product life cycle. The managers are thinking about using extension strategies for these products. What is meant by the term ‘secondary market research’? What is meant by the term ‘product life cycle’? Identify and explain two methods that Early Tots could use to gather primary market research data. Method 1: Explanation: Method 2: Explanation: For Examiner’s Use Identify and explain three extension strategies that Early Tots could use. Strategy 1: Explanation: Strategy 2: Explanation: Strategy 3: Explanation: Consider the advantages and disadvantages of two channels of distribution that Early Tots could use for a new range of wooden toys. Recommend which channel Early Tots should use. Justify your answer. Channel 1: Channel 2: Recommendation:
3. Marketing  →  3.2. Market research
3. Marketing  →  3.3. Marketing mix
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3
For Examiner’s Use Crompton Springs, a private limited company, bottles mineral water. The production method is automated but inefficient, because the machinery used was bought 20 years ago. The company uses unskilled and low paid workers to load and unload the production lines. The managers have decided to invest in new machinery. What is meant by ‘production method is automated’? Identify two features of a private limited company. Feature 1: Feature 2: Identify and explain two possible reasons why workers at Crompton Springs are low paid. Reason 1: Explanation: Reason 2: Explanation: For Examiner’s Use Identify and explain three problems that inefficiency can cause a business. Problem 1: Explanation: Problem 2: Explanation: Problem 3: Explanation: Do you think that the employees at Crompton Springs will be happy with the managers’ decision to invest in new machinery? Justify your answer.
4. Operations management  →  4.1. Production of goods and services
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4
For Examiner’s Use XYZ is a large retail business with over 50 shops. The business is going to open a new shop and wants to recruit a manager. A job description for the new position of shop manager has been produced. The directors are also looking at the methods they use to pay their employees. Identify two ways of measuring the size of a business. Way 1: Way 2: Identify two suitable places to advertise the position of a new shop manager. Place 1: Place 2: Identify and explain two advantages to XYZ of producing a job description for the position of shop manager. Advantage 1: Explanation: Advantage 2: Explanation: For Examiner’s Use Identify and explain three different payment methods that XYZ could use to reward their employees. Method 1: Explanation: Method 2: Explanation: Method 3: Explanation: Do you think that the appointment of a suitable shop manager will mean that the new shop is certain to be successful? Justify your answer.
2. People in business  →  2.3. Recruitment, selection and training of employees
1. Understanding business activity  →  1.3. Enterprise, business growth and size
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5
For Examiner’s Use Country W has a mixed economy. The public sector has grown in recent years. The Government has also introduced many new laws regulating business behaviour and protecting employees and consumers. What is meant by the term ‘mixed economy’? Identify two objectives often set by businesses in the public sector. Objective 1: Objective 2: Identify and explain two reasons why the size of the public sector might increase over time. Reason 1: Explanation: Reason 2: Explanation: For Examiner’s Use Identify and explain three ways in which consumers might benefit from consumer protection laws. Way 1: Explanation: Way 2: Explanation: Way 3: Explanation: The management of many businesses in the private sector think that employment legislation is making them less competitive. Do you agree? Justify your answer.
1. Understanding business activity  →  1.2. Classification of businesses
6. External influences on business activity  →  6.1. Economic issues
1. Understanding business activity  →  1.5. Business objectives and stakeholder objectives
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