f6 Bs p1 Sample Questions

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MUSENDO ONLINE PLATFORM

FORM 6
General Certificate of Education Advanced Level

BUSINESS STUDIES 6025/1


PAPER 1 REVISION
CHECK YOURSELF EXAM

INSTRUCTIONS TO CANDIDATES

Write your name, (Surname and Forename(s)), Centre number in the spaces provided at the top
of every answer sheet.

Answer all questions

The number of marks is given in brackets [ ] at the end of each question or part question.

Use black or blue pen ball point pen only.

200 marks
Tinofamba nevanofamba
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1. State any three different ways in which the size of a business might be measured. [3]

2. a. Identify any two factors that may cause a firm to relocate [2]
b. Outline any three state objectives for your country. [3]

3. a. What is an organizational chart? [2]


b. Explain two reasons why an organization chart would be useful to employees in a
business. [4]

4. a. Distinguish between McGregor’s Theory X and Y. [4]


b. How might the differences in the two theories be reflected in the leadership style of
managers? [4]

5 a. What is:

i. horizontal intergration,
ii. vertical intergration? [2]

b. Evaluate the advantages of merging horizontally with another firm. [5]

6. Herzberg distinguished between ‘hygiene’ and ‘motivating’ factors.

Why did he consider the distinction important? [5]

7. a. Why is motivation of the workforce important to any organisation? [3]


b. State and explain any two non-financial techniques which could be used to
motivate workers. [4]

8. a. State two factors which indicate falling morale in a firm [2]


b. Explain why management of a firm would wish to maintain a high level of morale
among its workers. [4]

9. A firm buys a machine worth $20 000. Its expected useful life is 5 years and has a
residual value of $1 000.

Calculate the depreciation charge for this machine in year four, using

a. Straight line method [2]


b. Reducing balance method at 20% per annum [2]

10. The financial director of a firm states that there is an urgent need to increase working
capital.
a. What is meant by working capital? [2]
b. Why might there be a need to increase it? [3]
c. Suggest three ways this could be done. [3]
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11. a. What are the major costs of holding stock? [3]
b. Explain why a ‘Just in Time’ approach may not be wise. [5]

12. a. What is the difference between primary and secondary research? [4]
b. Explain the circumstances in which you would use primary research rather than
secondary research in a market research exercise. [4]

13. A company manufactures product X and the following data is shown:

Direct Costs per unit $70


Overheads $50 000
Current output 120 000 units
Selling Price $140
Full capacity output 150 000 units

From the above information, calculate the company’s capacity utilization. [3]

14. A firm has the capacity to produce and sell 10 000 units of a certain product per month.
Current output is only 9 000 units. The following data is also known:

Selling price $500 per unit


Variable costs $300 per unit
Fixed costs $1 000 000

Calculate
a. Contribution per unit [2]
b. Break even output [2]
c. Margin of safety [2]
d. Net profit at current output [2]

15. a. List any two types of production methods. [2]


b. How can a manufacturer of cellphones improve the productivity of his workers? [5]

16. a. What is niche marketing? [2]


b. Evaluate the usefulness of market skimming. [5]

17. a. What is benchmarking? [2]


b. Assess the significance of maintaining quality in a business organisation. [5]

18. a. State any two decision making tools. [2]


b. Explain one measure of central tendency [2]
c. What is the importance of Information Technology to a marketing department? [4]

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19. A firm invests $800 000 in a project and forecasts the following net annual returns.

$
Year 1 100 000
Year 2 200 000
Year 3 350 000
Year 4 300 000

a. Explain the term payback period. [2]


b. Calculate the pay back period for this project. [2]
c. Outline the weaknesses of this method investment appraissal. [2]

20. The following information shows the effect of a price change, from $10 to $15, to a
product produced by Musendo Ltd.

Price ($) Expenditure on advertising Sales (units)


10 5 000 20 000
15 6 000 22 000

Calculate the promotional elasticity of demand for this product [2]

21. a. What are the three physical attributes of a product? [3]


b. Explain any two the benefits of competition to consumers. [4]

22. a. Identify any two qualities of a leader. [2]


b. What are the benefits of motivation to an organisation? [3]

23. a. Using an example explain the meaning of lean production. [3]


b. Draw a break even chart showing clearly the following:

i. Margin of safety
ii. Break even point [4]

24 Assess the usefulness of computers to a construction company. [6]

25. a. What is price elasticity of demand? [2]


b. Why might a firm wish to reduce its price elasticity of demand? [3]

26. Assess the contribution of market segmentation to overall success of an


organisation. [4]

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27. You are provided with the following costs for a product:

Fixed costs $50 000


Total variable costs $65 000
(output at 1 000 units)
Selling price per unit $90

Calculate:

a. The contribution per unit of output [3]


b. The break-even level of output [2]

28. What part might be the gearing ratio play in:


a. a company’s potential decision to seek further capital [3]
b. a potential shareholders decision on whether to buy shares or not? [3]

29. a State how economic activities are classified. [3]


b. Explain how the state can intervene to constrain businesses in your country. [4]

30. a. Distinguish between monetary policy and fiscal policy. [2]


b. State any two examples of external stakeholders of a business. [2]

31. How might management increase the willingness of employees to accept changes
in an organisation. [4]

32. To what extent is the knowledge of price elasticity of demand useful to a manufacturer
of shoes. [4]

33. Define the following terms

a. Capacity utilisation [2]


b. Work study [2]

34. Discuss the usefulness of a work study programme to a large business. [4]

35. How useful is price discrimination to the manufacturer of mobile handsets? [5]

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