Business Studies · OCR J204 · Operations, finance and influences on business · June 2022
A customer has bought a laptop from a computer shop.
By law, the computer shop must:
A match the price charged by a local competitor
B offer to upgrade the laptop for no extra charge
C provide virus protection to keep the customer’s files safe
D supply a laptop of satisfactory quality
[1]
Customer engagement:
A allows customers to try before they buy
B contributes to good customer service
C improves the product knowledge of employees
D shortens the supply chain
[1]
Performance data for Pallin Ltd for the last five years of trading is shown below.
| 2017 | 2018 | 2019 | 2020 | 2021 | |
| Profit | £15 000 | £0 | –£9000 | £17 000 | –£3000 |
Pallin Ltd’s average level of profit over the last five years is:
A £4000 per year
B £5000 per year
C £6400 per year
D £8000 per year
[1]
A perfume shop has a gross profit margin of 50%.
This means:
A for every £10 of sales, it makes £5 profit after all costs have been paid
B the perfume shop’s variable costs are exactly half of its fixed costs
C the shop charges customers double what it pays when buying the perfume
D to make £10 of profit, it needs to sell £50 of perfume
[1]
QT Homeware Ltd manufactures small kitchen appliances. The company has recently received a number of emails complaining that its kettles leak.
Which of the following actions would help QT Homeware Ltd deal with this problem?
A Include a cloth to wipe up any leaks in the box of all new kettles
B Launch a promotional campaign in a housekeeping magazine
C Meet with production workers to discuss how to reduce costs
D Physically test every hundredth kettle to ensure it is watertight
[1]
A drum kit manufacturer plans to make 500 drum kits this year. Estimated costs are as follows:
• raw materials £40 per drum kit
• rent £600 per month
• heating and lighting £900 per quarter
• other expenses £56 000 per annum
The manufacturer’s estimated total cost for the year is:
A £66 840
B £77 500
C £85 900
D £86 800
[1]
Which of the following would be a variable cost for a restaurant?
A Advertising fees
B Buildings insurance
C Chef’s salary
D Fruit and vegetables
[1]
Amaya is a gardener. She charges £15 per hour. Her fixed costs are £18 000 per annum. Her variable costs are £2 per hour.
How many hours of gardening will Amaya need to do to start to make a profit?
A 1059
B 1385
C 2340
D 3060
[1]
Which of the following is a benefit to a public limited company of using a share issue to raise finance?
A Dividends will need to be paid
B New skills will be brought into the company
C No interest will be paid
D Repayments will be spread over a long period of time
[1]
The impact of risk taken by a business:
A affects all business functions
B affects all business stakeholders equally
C only affects the finance function
D only affects the owners of the business
[1]
The marketing function of a well-known action toy manufacturer is about to launch a major advertising campaign.
This advertising campaign will affect the operations function of the business because:
A job production will need to be used to speed up production
B market research into which toy figures are most popular will be required
C more sets of action toy figures will need to be produced
D vacancies for action toy designers will need to be advertised
[1]
Kareem is an entrepreneur. He makes hand-made shoes for newborn babies. Data for his first four years of trading is shown below.
| Year 1 | Year 2 | Year 3 | Year 4 | |
| Number of pairs sold | 104 | 1040 | 820 | 1860 |
| Revenue | £2080 | £20 800 | £16 400 | £46 500 |
| Profit | –£24 000 | £2000 | –£1800 | £26 000 |
According to the data, which of the following is true?
A Costs have been greater than revenue in all four years
B In Year 2, Kareem reduced the average selling price of the shoes
C In Year 4, Kareem increased the average selling price of the shoes
D Revenue has increased year on year
[1]
Identify two possible advantages to a business of being environmentally friendly.
[2]
Explain one way climate change might affect business activity.
[2]
Analyse how BP’s finance function may influence its ability to meet BP’s objectives.
[3]
Calculate the percentage change in BP’s revenue between 2017 and 2019.
Show your workings
Answer........ %
[2]
Identify two factors that can affect a company’s revenue.
[2]
Identify two reasons why a UK business might choose to locate in another country.
[2]
Evaluate how globalisation has influenced where BP locates its businesses.
[7]
Text 2 Quality Textiles (QT)
Quality Textiles Ltd (QT) is a medium-sized, established business that manufactures clothes from its factory in Birmingham. Its clothes are sold to retail shops around the country. A summary of its profitability is shown in Table 1.
QT wants to expand the business by using a bank loan to buy a large van to help with deliveries. It will use average rate of return (ARR) to assess which model of van it will buy. Further information is provided in Table 2, below. The new van will mean employing a driver, in addition to the five drivers already working for the business.
QT’s cash flow forecast suggests it may struggle to pay the monthly van loan repayment. QT’s closing bank balance for the last five months is shown in Fig. 1.
QT had problems earlier in the year. It found its way into the local newspaper as part of an investigation into ethical practices in its business activities and supply chain.
Identify one method of selling products to customers.
[1]
Identify two ethical considerations for a business.
[2]
Explain one reason why a business should act ethically.
[2]
Calculate the average rate of return (ARR) for the Standard Van by using the information in Table 2.
Show your workings
Answer........ %
[3]
Analyse one reason why QT should buy the Standard Van. Refer to Table 2 in your answer.
[3]
Analyse QT’s cash position considering its current expansion plans.
[3]
Analyse QT’s profit position considering its current expansion plans.
[3]
Recommend whether QT’s cash position or profit position will have the biggest impact on its expansion plans.
[3]
Identify one economic factor which may affect a company’s profit.
[1]
Analyse the importance of quality in the production of the houses that BD plc produces.
[3]
Analyse one advantage to BD plc of obtaining 90% of its raw materials from the UK.
[3]
Analyse one advantage and one disadvantage to BD plc of producing components in batches at its factory.
[6]
Recommend whether BD plc should continue to produce components in batches at its factory.
[3]
* Evaluate how useful break-even analysis is to BD plc’s pricing and promotional decisions.
[9]
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