Mark Scheme

Business (4BS1)
Paper 01 Investigating small businesses
Question Which one of the following is a business stakeholder? Mark
Number Answer

1 (a) (i) AO1 - 1 mark

The only correct answer is C – Owner

(1)

Question Which one of the following is a limitation of training? Mark

Number Answer
1 (a) (ii) AO1 - 1 mark

The only correct answer is C – Loss of output

(1)

Question Which one of the following is an internal source of finance? Mark

Number Answer
1 (a) (iii) AO1 - 1 mark

The only correct answer is C – Personal savings

(1)
Question Which one of the following is the second stage in the product Mark
Number life cycle?
Answer
1 (a) (iv) AO1 - 1 mark

The only correct answer is A – Growth

(1)

Question Which one of the following is the markup on the packs of Mark
Number balloons?
Answer
1 (a) (v) AO2 - 1 mark

The only correct answer is B – Interest paid on loans

(1)

Question Which one of the following is a marketing activity? Mark

Number Answer

1 (a) (vi) AO2 - 1 mark

The only correct answer is C – Identifying customer needs

and wants

(1)
Question Define the term consumer goods. Mark
Number Answer
1 (b) AO1 - 1 mark
Award 1 mark for a correct definition of consumer goods.

 Goods and services sold to ordinary people rather than

businesses (1). (1)

Question Define the term revenue. Mark

Number Answer
1 (c) AO1 - 1 mark
Award 1 mark for a correct definition of revenue.

 Money from the sale of goods and services (1).

(1)

Question State one customer service provided by Tangos to its customers. Mark
Number Answer

1 (d) A02 - 1 mark

Award 1 mark for a customer service provided by Tangos to its
customers.

 Dine in and Takeaway options, Handmade Bread

and Buns, Table service and Customized orders
for special occasions

NB Do not accept a customer service that is not in the context

of Tangos
(1)
Accept any other appropriate response.
Question Explain one reason why objectives might change as businesses Mark
Number evolve.
Answer
1 (f) A01 - 3 marks

Award 1 mark for identification of one reason why objectives

might change as businesses evolve. Plus 2 further marks
for explaining the reason, for a maximum of 3 marks.

 Marketing conditions, technology, performance of the

business, legislation, internal reasons (1)

 Marketing conditions, this means they have to deal

with regular changes in the market (Ex: new entrants,
new products launch by rivals, economic decline)
(1) if trading become difficult to these marketing
conditions, business may decide that survival is more
important(1) (3)

NB Answers that list three reasons with no explanation will

get 1 mark only.

Accept any other appropriate response.

Question Outline one advantage of starting their own business to Mark

Number Shakthi and Karthik.
Answer
1 (f) A02 - 2 marks

Award 1 mark for identifying an advantage of starting their

own business to Shakthi and Karthik. plus 1 further mark
for linking it to the context of the question

 Shakthi and Karthik has personal satisfaction (1)

as they enjoyed well as they had the freedom in their
own business. (1)

NB Do not accept an advantage that is not in the context of

Tangos.
(2)
Accept any other appropriate response
Question Analyse the limitations of starting a partnership business to Mark
Number Shakthi and Karthik.

Indicative content
1 (g) AO2 = 3 marks AO3 = 3 marks

AO2
 Unlimited liabilities to both shakthi and karthik.
 Disagreements might occur between them.

AO3
 If Tangos makes losses rather than profits, shakthi and
karthik have to give their personal wealth to settle all the
losses and business debts.
 If there are disagreements between shakthi and karthik,
this can be bad impact to the business continuity and they
won’t be able to achieve its business goals and objectives.

(6)

Level Mark Descriptor

0 No Rewardable material.
Level 1 1-2  Limited application of knowledge and
understanding of business concepts and issues to
the business context. (AO2)
 Attempts to deconstruct business information
and/or issues, finding limited connections between
points. (AO3)
Level 2 3-4  Sound application of knowledge and understanding
of business concepts and issues to the business
context although there may be some
inconsistencies. (AO2)
 Deconstructs business information and/or issues,
finding interconnected points with chains of
reasoning, although there may be some logical
inconsistencies. (AO3)
Level 3 5-6  Detailed application of knowledge and
understanding of business concepts and issues to
the business context throughout. (AO2)
 Deconstructs business information and/or issues,
finding detailed interconnected points with logical
chains of reasoning. (AO3)
Question Define the term minimum wage. Mark
Number Answer
2 (a) AO1 - 1 mark
Award 1 mark for a correct definition of minimum wage.

Minimum amount per hour, which most workers are entitled

to be paid (1).

(1)

Question Define the term tariff. Mark

Number Answer
2 (b) A02 - 1 mark

Award 1 mark for a correct definition of tariff.

Tax on imports to make them more expensive (1).

(1)
Question Explain one advantage of job rotation to a business. Mark
Number
Answer
2 (c) A01 - 3 marks

Award 1 mark for identification of an advantage of job

rotation to a business, plus 2 further marks for explaining
this benefit for a business, for a maximum of 3 marks

 This will help to motivate workers/ provide more

flexibility to the business (1) and lead to
increase employee productivity (1) this results
more revenue and profits to the business. (1)

NB Answers that list three benefits with no explanation will

get 1 mark only

Accept any other appropriate response. (3)

Question Explain one possible impact of increasing interest rate to a Mark

Number business.
Answer
2 (d) A01 - 3 marks

Award 1 mark for identification of an impact of increasing

interest rate to a business, plus 2 further marks for
explaining this impact, for a maximum of 3 marks.

 When interest rates rises cost will increase for any

business that has already taken a loan. (1) this lead
to reduce profits(1) and results low growth of the
business due to low investments (1)

NB Answers that list three methods with no explanation will

get 1 mark only
(3)
Accept any other appropriate response
Question Analyse the importance of training to Tangos Bakery Mark
Number
Indicative content
2 (e) AO2 = 3 marks AO3 = 3 marks

AO2
 If tangos give a proper training to the employees, it
will increase job satisfaction and motivation.
 Training is important to Tangos to improve
employee flexibility as employees can shift in
different job roles.

AO3
 The employees will be happier working there and will
be more willing work efficiently and effectively.
 This will lead to create multi skilled workers and it
easy for Tangos to achieve any goals they may have
(6)
l
Question Analyse the benefits of recruiting full time employees to Mark
Number Tangos Bakery
Indicative content
2 (f) AO2 = 3 marks AO3 = 3 marks

AO2
 If tangos recruit full time workers, they are expected
to work in full working hours, whole week from 9 am
to 10 pm.
 Tangos employees will motivated as they get more
be benefits like overtime pay, health insurance etc.

AO3
 This will lead to smooth running of the business to
tangos and can provide continues customer service.
 This will lead to increase productivity, reduce
recruitment cost and this results more revenue and
profits to Tangos. (6)
Question Define the term break-even point. Mark
Number Answer
3 (a) A01 - 1 mark

Award 1 mark for a correct definition of break even point

 Level of output where total cost and total revenue are (1)
exactly same, either a profit or loss is made. (1)

Question Define the term autonomy. Mark

Number Answer
3 (b) A01 - 1 mark

Award 1 mark for a correct definition of autonomy.

 Giving workers the authority to make choices and (1)

decisions about the way they work(1)

Question State one type of market segment identified by Tangos bakery. Mark
Number
Answer
3 (c) A02 - 1 mark
Award 1 mark for a type of market segment identified by Tangos
bakery.

 Geographical segmentation

NB Do not accept a customer service that is not in the context

of Tangos

Accept any other appropriate response.

(1)
Question Calculate the the number of Additional guidance Mark
Number bread to be sold each month for
Tangos to breakeven

Answer
3 (d) A02 - 2 marks

$2 000/($5 - $2.50) (1)

800 bread (1)
Award 1 mark for correctly
substituting numbers into
formula

Award full marks for correct

numerical answer without
working (2)
Question Explain one limitation of break-even analysis to a business. Mark
Number
Answer
2 (e) A01 - 3 marks

Award 1 mark for identification of a limitation of break-even

analysis to a business, plus 2 further marks for explaining this
limitation, for a maximum of 3 marks.

 When constructing a break even chart, it is

assumed that total revenue and total cost are
shown in straight lines (1) but in practice, they may
not be straight lines (1) a business can lower cost
at high output due to bulk buying (1)

NB Answers that list three methods with no explanation will

get 1 mark only (3)

Accept any other appropriate response

Question Explain one benefit of cash flow forecast to a business. Mark

Number
Answer
3 (f) A01 - 3 marks

Award 1 mark for identification of a benefit of cash flow

forecast to a business, plus 2 further marks for explaining this
benefit, for a maximum of 3 marks.

 Identifying cash shortages(1) this will help a

business to identify how much cash needed in
advance (1) this will lead to maintain cash flow in
the business(1)

NB Answers that list three methods with no explanation will

get 1 mark only
(3)
Accept any other appropriate response
Question Tango Bakery is considering two options: Mark
Number Option 1: Crowdfunding
Option 2: Personal Savings

Justify which one of these two options Tangos Bakery should

choose.
Indicative content
3 (g) AO2 = 3 marks AO3 = 3 marks
AO4 = 3 marks

AO2
 Option 1 – By using crowdfunding Tangos can
raise large amount of money to increase its product
range
 Option 2 – By using personal savings Tangos will be
able to obtain money easily without increasing any debts.

AO3
 Option 1 – Investors do not need to be given any
financial reward in return for their money but could
instead be offered Tangos bakery products.
 Option 2 – Tangos can easily obtain money internally.
This won’t create any additional cost to Tangos. They can
improve its cash flow.
AO4

 Option 1 – However, However, Tangos bakery is only

a small business so may not have enough presence to
gain the funding needed and if they don’t meet the
target they set then they may end up with nothing.

 Option 2 – However, personal savings may not

enough to invest in the business. So that Tangos
won’t be able to achieve its target. This will lead to
increase additional cost and resource wastage.

(9)
Level Mark Descriptor
0 No Rewardable material.
Level 1 1-3  Limited application of knowledge and
understanding of business concepts and issues to
the business context. (AO2)
 Attempts to deconstruct business information
and/or issues, finding limited connections between
points. (AO3)
 Makes a judgement, providing a simple justification
based on limited evaluation of business information
and issues relevant to the choice made. (AO4)
Level 2 4-6  Sound application of knowledge and understanding
of business concepts and issues to the business
context although there may be some
inconsistencies. (AO2)
 Deconstructs business information and/or issues,
finding interconnected points with chains of
reasoning, although there may be some logical
inconsistencies. (AO3)
 Makes a judgement, providing a justification based
on sound evaluation of business information and
issues relevant to the choice made. (AO4)
Level 3 7-9  Detailed application of knowledge and
understanding of business concepts and issues to
the business context throughout. (AO2)
 Deconstructs business information and/or issues,
finding detailed interconnected points with logical
chains of reasoning. (AO3)
 Makes a judgement, providing a clear justification
based on a thorough evaluation of business
information and issues relevant to the choice made.
(AO4)
Question Define the term mark-up. Mark
Number
Answer

4 (a) A01 - 1 mark

Award 1 mark for a correct definition of mark up.

 Percentage added to costs that makes a profit for a

business when setting the price (1)

(2)

Question Define the term retailer. Mark

Number
Answer

4 (b) A01 - 1 mark

Award 1 mark for a correct definition of retailer.

 Business that buy goods from manufacturers and

Wholesalers and sell them in smaller quantities to
customers.(1)

(2)
Question Explain one factor that might affect the choice of distribution Mark
Number channel of a business.

Answer
3 (f) A01 - 3 marks

Award 1 mark for identification of a factor that might affect the

choice of distribution channel of a business, plus 2 further
marks for explaining this factor, for a maximum of 3 marks.

 Proximity to market (1) business that make large

or heavy products may be located close to their
customers to keep cost down (1) this will lead to
increase its profit level (1)

NB Answers that list three methods with no explanation will

get 1 mark only
(3)
Accept any other appropriate response

Question Explain one benefit of public relations (PR) to a business. Mark

Number
Answer
3 (f) A01 - 3 marks

Award 1 mark for identification of a benefit of public relations

(PR) to a business, plus 2 further marks for explaining this
benefit, for a maximum of 3 marks.

 The main benefit of PR is to increase sales (1) this

will lead to improve the business image (1) and
reinforce an established brand. (1)

NB Answers that list three methods with no explanation will

get 1 mark only

Accept any other appropriate response (3)

Question Evaluate the importance of market research to Tangos. Mark
Number
Indicative content

4 (c)
AO1 = 3 marks AO2 = 3 marks
AO3 = 3 marks AO4 = 3 marks

AO1
 Market research is identifying and satisfying
customers’ needs and wants.
 It involves gathering, presenting, and analyzing
information relevant for marketing decisions..
AO2
 Tangos can be more successful if it supplies
products that meet customers’ needs.
 Also, market research is a useful leverage to inform
business decisions to Tangos such as setting correct
price for its new savoury platters and finding the
correct target market.
AO3
 This means they try to predict what customers want in
advance and respond to changes very quickly. They will
be able to keep up with the latest trends, flavours,
technology and designs related to their product
portfolio.
 Tangos will be able to make good, quality decisions
so that they will be able to achieve objectives and
goals and be a successful business.
AO4
 However, this may only provide accurate
information about customers’ needs if the results
of the market research are accurate ones.
 Quality of the decision depends on the representative (12)
sample and data collected. Otherwise, research is a waste
of money to Tangos and may even bring harm to them.
Level Mark Descriptor
0 No Rewardable material.
Level 1 1-4
 Demonstrates elements of knowledge and
understanding of business concepts and issues,
with limited business terminology used. (AO1)
 Limited application of knowledge and
understanding of business concepts and issues to
the business context. (AO2)
 Attempts to deconstruct business information
and/or issues, finding limited connections between
points. (AO3)
 Makes a judgement, providing a simple justification
based on limited evaluation of business information
and issues relevant to the choice made. (AO4)
Level 2 5-8  Demonstrates mostly accurate knowledge and
understanding of business concepts and issues
including appropriate use of business terminology
in places. (AO1)
 Sound application of knowledge and understanding
of business concepts and issues to the business
context although there may be some
inconsistencies. (AO2)
 Deconstructs business information and/or issues,
finding interconnected points with chains of
reasoning, although there may be some logical
inconsistencies. (AO3)
 Makes a judgement, providing a justification based
on sound evaluation of business information and
issues relevant to the choice made. (AO4)
Level 3 9 - 12  Demonstrates accurate knowledge and
understanding of business concepts and issues
throughout, including appropriate use of business
terminology. (AO1)
 Detailed application of knowledge and
understanding of business concepts and issues to
the business context throughout. (AO2)
 Deconstructs business information and/or issues,
finding detailed interconnected points with logical
chains of reasoning. (AO3)
 Makes a judgement, providing a clear justification
based on a thorough evaluation of business
information and issues relevant to the choice made.
(AO4)
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