Reference no: EM132526299

IFYBS002 Business Studies - Northern Consortium UK

Question A1

The tertiary sector of business activity includes all of the following:

a) retailing, transport and telecommunications.

b) banking, retailing and construction.

c) insurance, fishing and hotels.

d) tourism, car manufacturing and telecommunications.

Question A2

Which of the following is not a characteristic of a sole trader business organisation?

a) Unlimited liability

b) Profits are not shared

c) Business has a separate legal status

d) Requires no legal formalities to set up

Question A3

Which of the following is an accurate definition of the term ‘market'?

a) A place where human needs are met

b) A physical place in which goods are exchanged

c) A place where buyers and sellers meet to engage in trade

d) A place where factor inputs are traded

Question A4

Which of the following methods is most likely to provide qualitative market research data?

a) Focus groups

b) Online surveys

c) Test markets

d) Observation

Question A5

Following the decision to reduce price from £20 to £18 a firm observed that sales increased from 4000 units to 4600 units per week. Other things being equal this suggests that the price elasticity of demand for the product was:

a) 1.5

b) -0.67

c) -1.5

d) 0.67

Question A6

On a break-even chart a horizontal line represents:

a) total cost.

b) total revenue.

c) total fixed costs.

d) total variable costs.

Question A7

Which of the following sources of finance is most likely to be used by a business experiencing short-term cash flow problems?

a) Mortgage

b) Overdraft

c) Bank loan

d) Debt-factoring

Question A8

The following information is taken from the statement of financial position of a public limited company.

Trade receivables £3.2m
Inventories £0.3m
Tax not yet paid £3m
Trade payables £2m
Overdraft £0.5m
Debentures £6m

Calculate the acid test ratio of the business.

a) 1.4

b) 0.58

c) 0.64

d) 1.28

Question A9

Theory X and Theory Y are theories of leadership styles developed by?

a) Maslow

b) McGregor

c) Herzberg

d) Taylor

Question A10

A feature of delayering an organisation's structure is:

a) increase in the organisation's hierarchy.

b) reduced workload for managers.

c) shorter chain of command.

d) reduced span of control.

Question A11

Which of the following is not a benefit to a business of training its workforce? [ 1 ]

a) Increase in labour productivity

b) Reduction in waste

c) Increase in short term costs

d) Reduction in customer returns

Question A12

Legislation which affects the relationship between business and consumers would be classed under PEST Analysis as:

a) a political factor.

b) an economic factor.

c) a social factor.

d) a technology factor.

Question A13

Which of the following lists only external stakeholders of business?

a) Lenders, shareholders, government

b) Government, suppliers, customers

c) Lenders, suppliers, employees

d) Local community, managers, suppliers

Question A14

In the acronym SMART, the letter ‘S' stands for :

a) strategic.

b) short-term.

c) suitable.

d) specific.

Question A15

Which acronym is used to describe the hierarchy of objectives?

a) SWOT

b) SMART

c) MOST

d) PEST

Question A16

a) Define the term ‘franchise'.

b) Briefly explain one advantage of a franchise.

Question A17

a) Define the term ‘market segmentation'.

b) Briefly explain one benefit of market segmentation.

Question A18

Use the following information about Product Y to calculate and interpret budget variances for each of the four items shown.

	Budget (£000's)	Actual (£000's)
Revenue	420	415
Raw material cost	189	187
Labour cost	160	156
Gross profit	71	72

Question A19

Explain one advantage and one disadvantage to managers of delegating tasks to subordinates.

Question A20

Briefly explain one advantage and one disadvantage to a fireworks manufacturer of legislation aimed at protecting consumers.

Questions 21-25: Read the following text and answer the questions that follow.

Brian is a sole trader. He owns a small taxi business. Brian's business has been successful over the past five years and he is now considering how he might expand. He has heard from a friend, Jimmy, that a taxi business in a neighbouring town is up for sale, due to the owner's wish to retire. Brian has made some enquiries and has been told that the business could be bought for £25,000. This price is for the purchase of goodwill only. If Brian were to buy the business then, in addition to the purchase price of £25,000, he would also have to buy a new taxi vehicle and employ a driver.

Jimmy, has suggested that he and Brian enter into a partnership. Jimmy is prepared to invest £15,000 of his redundancy money that he received when the local coal mine closed down. Jimmy would also be the driver for the second vehicle.

Brian has produced the forecast data shown in Table 1, for the taxi business he is considering buying.

Table 1

Passenger journeys per year	3500
Average revenue per journey	£6.80
Average variable cost per journey	£2.40
Fixed costs per year	£13200

Question A21

Brian and Jimmy have experience of working in two different sectors of business activity. State these two sectors.

Question A22

Explain one disadvantage to Brian being a sole trader.

Question A23

Using the data in Table 1 above, calculate the:

a) break-even number of journeys.

b) forecast margin of safety.

c) forecast profit for the year.

Question A24

Using your results from A23 and other information, explain two reasons why Brian should not buy the taxi business in the neighbouring town?

Question A25

Analyse two sources of finance that Brian could use to buy a new taxi vehicle if he were to purchase the business in the neighbouring town.

Section B

Question B1

a) Analyse the importance of the qualities of entrepreneurs to the success of a business.

b) Discuss how and why a car manufacturer adds value to its products.

Question B2

a) Analyse the benefits to a business of accurate market research.

b) Evaluate the methods of promotion a manufacturer of personal hygiene products might use when launching a new deodorant for men into the market.

Question B3

a) Analyse the uses to a business of cash flow forecasts.

b) Discuss how a business might improve its cash flow.

Question B4

a) Analyse the role of the HRM department in a large retail bank.

b) Discuss the benefit to a large retail bank of having a well-trained workforce.

Question B5

a) Analyse the objectives of one internal and one external business stakeholder.

b) Discuss how stakeholders influence and are influenced by business activities.

Attachment:- Business Studies.rar