AS Business
BUSINESS 1 PRACTICE PAPER (A)
1 hour 30 minutes
Materials
For this paper you must have:
N a calculator.
Instructions
N Use black ink or black ball-point pen.
N Fill in the boxes at the bottom of this page.
N Answer all questions.
N You must answer the questions in the spaces provided.
Do not write outside the box around in eachor on blank pages.
N Do all rough work in this answer book.
Cross through any work you do not want to be marked.
Information
N The marks for questions are shown in brackets.
N The maximum mark for this paper is 80.
Please write clearly, in block capitals, to allow character computer recognition.
Centre number:
Candidate number:
Surname:
Forename(s):
Candidate signature:
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Only one answer per question is allowed.
For each answer completely fill in the circle alongside the appropriate answer.
3
Correct method:
Wrong methods: 7
If you want to change your answer you must cross out your original answer as shown.
If you wish to return to an answer previously crossed out, ring the answer you now wish to select as shown.
Section A
ANSWER ALL QUESTIONS IN THIS SECTION
01
Which one of the following is an adverse variance?
A
Sales revenue lower than budget
B
Raw material costs lower than budget
C
Gross profit margin higher than budget
D
Marketing expenditure lower than budget
02
A soft drinks manufacturer sells each can for 50p. The variable costs per can are 10p.
Fixed costs per year are £4 million. How much profit will be made if the business sells 15 million cans?
A
£2 million
B
£3 million
C
£6 million
[1 mark]
D
£3.5 million[1 mark]
03
Which of the following is not a benefit of training?
A
Improved productivity
B
Higher employee wages
C
Better quality
D
Improved reputation as an employer
[1 mark]
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Section C
ANSWER ALL QUESTIONS IN THIS SECTION
15
Hornby
The model train maker, Hornby, has recently announced its first annual profit in the last three years.
The company, which also owns the Airfix and Scalextric brands, enjoyed a 13% growth in sales and made a profit
of £1.5m. The share price of Hornby rose by 5% after the reporting of these results.
In recent years the company has suffered losses, due mainly to the economy and problems with suppliers. It also
reported disappointing sales of models related to the 2012 London Olympics which the company said were “not
only loss making but were a distraction from the core business for both our consumers and management”.
Hornby manufactures the majority of its products in China and India. Its main markets are the UK, Europe and
the USA. The company was heavily reliant upon a major supplier of model railway products in China. At one point
it supplied 75% of these products. As a result of problems with this supplier, more than 10% of the products it
ordered were not delivered. Consequently, the company failed to meet its sales targets.
Since then Hornby’s performance has improved. The company is no longer reliant on its Chinese supplier and has
transferred 10% of its production back to the UK, using local suppliers. Exploiting its strong brand image, Hornby
have launched updated products such as ‘The Flying Scotsman’ train and World War 2 aircraft. To attract the
children’s market a new ‘Thomas the Tank Engine’ range has been released.
In response to the growth in online retailing, Hornby has invested in a ‘state of the art’ warehouse using new
technology to monitor stock levels. It has also opened an ‘e-commerce’ division, responsible for the company’s
website and promoting its products through social media.
Hornby are now confident that the combination of its broad portfolio of strong brands with a more reliable supply
chain will result in further improved profits.
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Business 1 Practice Paper (B)
MARK SCHEME
Possible lines of argument include:
N Employee engagement is a workplace approach designed to ensure that employees are committed to their
organisation’s goals and values.
N The vision of New Look and how its staff should perform is stated on their website and there is an emphasis on the
employee thinking quick in line with the speed at which the market changes for fashion
N Staff feel motivated as they are considered an integral part of the sales process and the customer experience in store
N By encouraging staff to use social media to promote the brand they work for, this demonstrates the fact all staff
contribute to the success of the company.
N This aligns itself with ‘esteem needs’ on Maslow’s Hierarchy
N Employee engagement in this manner can reduce labour turnover and absenteeism within the firm.
Q16.2 To what extent will the market segmentation strategies being adopted by New Look be successful?
Justify your view. [16 marks]
Marks for this question: AO1 = 4, AO2 = 2, AO3 = 4 and AO4 = 6
Level The candidate will typically demonstrate:
4
Marks
An excellent response overall that is fully focused on the key demands of the
question
13 – 16
Provides an answer to the question set that:
N demonstrates a depth and range of knowledge and understanding that is precise
and well selected in relation to issues in the question
N demonstrates analysis throughout which is well developed, is applied effectively to
the context and considers a balanced range of issues in the question
N makes judgements or provides solutions which are built effectively on analysis,
show balance and have a clear focus on the question as whole throughout
3
A good response overall that focuses on many of the demands of the question
9 – 12
Provides an answer to the question set that:
N demonstrates a depth and range of knowledge and understanding of the issues in
the question
N demonstrates analysis which is well developed, applied effectively to the context
and considers a range of issues in the question
N makes judgements or provides solutions which are built on analysis, show balance
and address the question as a whole.
continued over >
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Business 1 Practice Paper (B)
MARK SCHEME
2
A reasonable response overall that focuses on some of the demands of the
question
5–8
Provides an answer to the question set that:
N demonstrates a limited knowledge and understanding of a range of issues in the
question or a good knowledge and understanding of relatively few issues in the
question
N demonstrates analysis which is well developed, applied to the context and considers
some of the issues in the question
N makes judgements or provides solutions which are built on analysis, but lack balance
and are not fully focused on the question as a whole
1
A limited response overall with little focus on the demands of the question
1–4
Provides an answer to the question set that
N demonstrates a limited range and depth of knowledge and understanding of issues in
the question
N demonstrates analysis with little development, mainly descriptive application to the
context and considers a limited number of issues in the question
N makes judgements or proposes solutions which have limited links to analysis or
limited focus on the question as a whole
Examples of how the assessment objectives might be met in this question include:
N Demonstrate knowledge and understanding of relevant issues such as market segmentation (AO1).
N Be applied to the context of New Look and its chosen strategies (AO2).
N Analyse the possible impact of market segmentation on the success of the business (AO3).
N Evaluate qualitative and quantitative information to make an informed judgement on whether the market segmentation
being undertaken by New Look will be successful (AO4).
An excellent response must make a supported judgement on the extent to which the market segmentation strategies
being adopted will be successful
Possible lines of argument include:
N Identifying new areas for product development can create additional revenue streams and prevent the risk of relying on
one sole market
N New Look are launching cosmetic products which can act as a complementary good for customers who are buying
clothes
N By bringing out a range of similar clothes priced differently, this can ensure all market segments are catered for and this
can help New Look increase its market share in the UK from 6%
N The geographical segmentation (targeting China and other foreign markets) can ensure customers spending patterns
are considered and this can result in New Look maximising their revenue in these markets.
N Markets are dynamic and always changing (in particular Fashion markets), thus New Look will need to constantly
research changes in the market and this can be expensive and time consuming
N The gender segmentation of store entrances has generated mixed reviews in the media and the risk may be that the
needs of their larger market segment (females) may be neglected
N This could result in many females switching to rival brands such as Topshop or Dorothy Perkins whose use of celebrity
endorsement has driven sales for their women’s range of clothing.
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