Unit 2 June 2011 Questions
1 (a) What does it mean if a company has limited liability?
(2 marks)
1 (b) How does having an objective help Fine Tune Aerials Ltd?
(4 marks)
1 (c) Explain the benefits to Fine Tune Aerials Ltd of growing in size.
(6 marks)
1 (d) Do you think that Fine Tune Aerials Ltd should relocate to a larger city?
Use Item A to justify your answer.
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(9 marks)
2 (a) Describe two suitable ways in which Midlands Timber Ltd might promote its garden
furniture.
(4 marks)
2 (b) Explain why Midlands Timber Ltd ’s garden furniture will probably be sold at a lower
price on the internet than at garden centres.
(4 marks)
2 (c) (i) Midlands Timber Ltd sells high quality products and it is important that every one of
its products is made to the same high standard.
Outline a reason why it is important that Midlands Timber Ltd produces a high quality
product.
(2 marks)
2 (c) (ii) Explain one way in which Midlands Timber Ltd can make sure that all of its products
are of a suitable standard.
(4 marks)
2 (d) Midlands Timber Ltd ’s managers want to reduce the number of employees who leave
the business to go and work elsewhere. They are considering two ways of achieving this:
 increasing wages so that they are much higher than those paid in other similar
businesses
 giving a loyalty bonus of £5000 to employees who stay with the business for five
years.
What action do you think Midlands Timber Ltd should take? Use Item B to justify your
answer.
(9 marks)
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3 (a) What is meant by the term ‘expenses’?
(2 marks)
3 (b) (i) Using the formula in Item C, calculate HLS ’s net profit margin for 2010. Show your
working.
(2 marks)
3 (b) (ii) What does the financial information tell you about HLS ’s profits?
(3 marks)
3 (c) HLS is considering funding the new fitness centre by either using its retained profits or
by obtaining a loan from a bank.
Which method do you think HLS should use? Use Item C to justify your answer. (9 marks)
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June 2012 Questions
1 (a) What is meant by off the job training?
(2 marks)
1 (b) Explain why businesses might choose to have their employees trained in fire safety at
the FAST training centre, rather than train them in-house.
(4 marks)
1 (c) Explain how David might use the feedback from the training to improve FAST courses.
(4 marks)
1 (d) To help David improve the training courses in the future, he is considering two ways of
getting regular feedback:
 getting his trainers to write a report on how each course went
 asking the people on the course to complete a questionnaire, saying what they
thought of the course.
Advise David on which method he should use. Give reasons for your advice.
(9 marks)
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2 (a) Describe one advantage to PP Ltd of selling its goods only on the internet.
(2 marks)
2 (b) Explain why the demand for computer mouse mats bought as promotional freebies
might have fallen.
(4 marks)
2 (c) Describe how PP Ltd might extend the life cycle of its products such as the computer
mouse mats.
(4 marks)
2 (d) The demand for PP Ltd ’s products has increased and the managers want to open a
new factory. It is considering two possible locations in:
 the UK or
 China.
Advise PP Ltd ’s managers on which is likely to be the best option. Give reasons for your
advice.
(9 marks)
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3 (a) What is meant by the term ‘current asset’?
(2 marks)
3 (b) (i) Using the formula in Item C, calculate Imber Showers Ltd ’s current ratio for 2012.
Show your workings.
(2 marks)
3 (b) (ii) Imber Showers Ltd ’s current ratio has changed between 2011 and 2012.
Describe how this change might affect Imber Showers Ltd.
(3 marks)
3 (c) Explain one advantage and one disadvantage for Imber Showers Ltd of using flow
production.
(6 marks)
3 (d) Advise the managers of Imber Showers Ltd on whether they should use Just in Time
(JIT) stock control to help them to reduce costs. Give reasons for your advice.
(9 marks)
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June 2013 Questions
1 (a) Describe what is meant by a ‘limited company’.
(2 marks)
1 (b) State two items that might be included in an induction programme. Explain why each is
important to a new employee.
(4 marks)
1 (c) Explain how outsourcing the tube bending might help PPL when making its multi-gyms.
(6 marks)
1 (d) PPL’s Managing Director is thinking about changing from batch production to flow
production, to assemble the multi-gyms. Advise the Managing Director on whether or not
you believe that this is a good idea for PPL. Use the information in Item A to support your
answer.
(9 marks)
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2 (a) Describe what is meant by ‘span of control’ in an organisation chart.
(2 marks)
2 (b) Describe two suitable ways in which KB’s sales team might advertise the newly-built
houses.
(4 marks)
2 (c) KB is thinking of changing from having one national headquarters to three regional
offices.
Describe two benefits to KB of having regional offices.
(4 marks)
2 (d) KB is trying to sell more houses. Advise the Managing Director on whether cost-plus is
the best pricing strategy to use to help the business achieve an increase in sales.
Use Item B to support your answer.
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(9 marks)
3 (a) Describe one benefit to a business of becoming a public limited company (plc).
(2 marks)
3 (b) (i) Calculate HighSkies’ gross profit margin percentage for 2012.
(3 marks)
3 (b) (ii) Explain one reason why HighSkies’ gross profit margin percentage might have
changed between 2011 and 2012.
(2 marks)
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3 (c) HighSkies’ objective has recently changed and is now as follows.
“To create an airline that respects the interests of all its stakeholders, especially its
customers and those who work for HighSkies.”
Explain why HighSkies’ shareholders might be unhappy with the company’s new objective.
(4 marks)
3 (d) HighSkies’ Directors need to raise £80 million to continue to expand the business.
They are considering two ways of doing this:


to sell more shares in the business
to obtain a loan from a bank.
Advise HighSkies’ Directors on which would be the best way of raising the money.
Use Item C to support your answer.
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(9 marks)
June 2014 Questions
1 (a) Explain one suitable method to promote the opening of the factory shop.
(2 marks)
1 (b) Briefly explain two advantages to Dotis Ltd of opening a factory shop to sell its
glassware directly to the public.
(4 marks)
1 (c) Explain how Dotis Ltd might reduce the percentage of below-standard glassware that it
produces.
(4 marks)
1 (d) Dotis Ltd needs to recruit a manager for the factory shop. It is considering two ways of
doing this:
• promoting an existing employee
• recruiting somebody new to the business.
Advise Dotis Ltd on which would be the better option for the business to take. Use Item A to
support your answer.
(9 marks)
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2 (a) List two stakeholders of Hey Presto.
(2 marks)
2 (b) Briefly explain one advantage and one disadvantage to Hey Presto of growing in size.
(4 marks)
2 (c) Explain a benefit to Hey Presto of choosing to replace diesel vans with more expensive
electric vehicles.
(4 marks)
2 (d) Christine is considering two ways in which Hey Presto might expand:
• continuing to buy new vans from the profits the business makes
• merging with its competitor, Fast Track Ltd.
Advise Hey Presto on which of these two methods of expanding the business would be more
suitable for the business. Use Item B to support your answer.
(9 marks)
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3 (a) What is a statement of financial position (balance sheet)?
(2 marks)
3 (b) (i) Calculate Carpets2U’s acid test ratio for 2014.
(2 marks)
3 (b) (ii) Explain how the change in Carpet2U’s acid test ratio might affect the business.
(3 marks)
3 (c) Explain two advantages to Carpets2U of introducing staff appraisals.
(6 marks)
3 (d) Carpets2U is thinking of increasing the range of goods that are sold in its stores.
Advise Carpets2U whether you believe that this is a good idea.
Use Item C to support your answer.
(9 marks)
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June 2015 Questions
1)a) State two features of a private limited company.
(2 marks)
1)b) Explain two reasons why PA Ltd might move to the new location.
(4 marks)
1)c) Explain how increasing its product portfolio might help PA Ltd.
(4 marks)
1)d) If David moves his business to the retail park he will want to attract new customers as
well as keep his old customers. He knows he will need to get the pricing strategy right.
Recommend a suitable pricing strategy for David. Use Item A to support your answer.
(9 marks)
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2)a)i) Using the formula in Item B, calculate BB plc’s net profit margin for 2014.
Show your workings.
(2 marks)
2)a)ii) BB plc’s net profit changed between 2013 and 2014.
Explain one way this change might have affected the business.
(3 marks)
2)b) BB plc is thinking about introducing a JIT system for ordering stock. Explain one
advantage and one disadvantage to BB plc of the JIT system.
(6 marks)
2)c) Advise the Board of Directors at BB plc how they should finance the new
production line. Use Item B to support your advice.
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(9 marks)
3)a) Describe one benefit for a company of merging with a similar business.
(2 marks)
3)b) Explain one method JP Ltd could use to recruit high quality temps.
(4 marks)
3)c) Explain one advantage and one disadvantage to JP Ltd of operating from one central
office.
(6 marks)
3)d) Kate knows that the threat of redundancies has lowered her staff’s motivation. She has
thought of two methods to improve motivation at JP Ltd:
 pay bonuses to the staff who find the most jobs for temps
 promote some staff to look after JP Ltd’s more important customers.
Which method would you recommend Kate to use? Use Item C to justify your
recommendation.
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