Business Studies (054)

I Pre- Board Examination (2021-2022)

Class XII

MM: 40 Time: 2 hours

General Instructions:

This is a Subjective Question Paper containing 12 questions.

This paper contains 4 questions of 2 marks each, 4 questions of 3 marks each and 4 questions of 5
marks each.

2 marks questions are Short Answer Type Questions and are to be answered in 30-50 words.

3 marks questions are Short Answer Type Questions and are to be answered in 50-80 words.

5 marks questions are Long Answer Type Questions and are to be answered in 80-120 words.

This question paper contains Case/Source Based Questions.

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Q. 1 A company is manufacturing paper plates and bowls. It produces 1,00,000 plates and bowls
each day. Due to local festival it got an urgent order of extra 50,000 plates and bowls per day.

1. Name the source of recruitment of labour the company needs to fulfill its order.

2. Explain any one merit of this method. (2)

Q. 2 A company requires Rs. 2 crore for inventory, payment of wages, salaries, maintaining bank
balance, etc.

Suggest which financial market, company may approach and why? (2)

Q. 3 The workers of a factory remain idle because of lack of knowledge of hi-tech machines. Frequent
visit of engineer is made which causes high overhead charges. Suggest the method of training that
should be given to the employees. Explain. (2)

Q. 4 You are the manager of Bharti Chemicals Ltd. It is reported to you that postal expenses have
increased by 10% over standard rates and cost of raw materials has increased by 2%. Which
principle of management control is referred to here? Which of the two deviations will be more critical
to you? (2)

Q. 5 Amit and Mikki are working in the same organisation but in different departments. One day at
lunch time Mikki informed Amit that due to computerization some people are going to be retrenched
from the organisation. Name the type of communication. State any two limitation of this type of
communication. (3)
Q. 6 A behavior study was done on total of 100 employees of an organisation. Group A (of 50
employees) were appreciated by the manager for their work and initiative for new idea. All these
employees were given option of flexible working hours and were paid wages at a higher piece rate.
On the other hand, Group B (of remaining 50 employees) was criticized for their poor performance.
Their increments were stopped and they were paid wages at a lower piece rate.

a) Identify and explain the feature of motivation highlighted in the above case.

b) What type of leadership if followed by the manager?

OR

State any three features of motivation as an element of Directing. (3)

Q. 7 Amar is doing his transport business in Delhi. His buses are generally used for the tourists going
to Jaipur and Agra. He wants to expand and diversify his Transport business. Enumerate any three
factors affecting his fixed capital requirements. (3)

Q.8 D & D Ltd. is a large manufacturing unit. Recently, the company has conducted the time and
motion studies and concluded that an average worker could produce 120 units per day. However, it
has been noticed that average daily production of a worker is in thw range of 80-90 units. Identify the
function of management discussed here and explain two of its features. (3)

Q. 9 Discuss the working of the redressal machinery under Consumer Protection Act, 2019. (5)

Q. 10 The Directors of a company want to modernise its plant and machinery by making a public
issue of shares. They wish to approach the stock exchange, while the finance manager prefers to
approach a consultant for the new public issue of shares. Advise the directors whether to approach
the stock exchange or a consultant for new public issue of shares. Also explain them about any four
methods which the company may adopt for the new public issue of shares. (5)

Q. 11 "Our assets walk out of the door each evening, we have to make sure that they come back the
next morning." This statement relates to which function of management. Explain the importance of
this function. (5)

Q. 12 Tata International Ltd. earned a net profit of Rs.50 crores. Ankit the finance manager of Tata
International Ltd. wants to decide how to appropriate these profits. Identify the decision that Ankit will
have to take and also discuss any four factors which will help him in talking this decision.

OR

A company's earnings before interest and tax is Rs.7 lac. It pays 10% interest on its debt. Total
investment of company is Rs.50 lacs. Advise the company whether it should include debt or equity to
raise its capital. Will the company's decision to raise funds from debt or equity change if the EBIT
becomes Rs. 3 lacs? (5)

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 ANSWER KEY

A. 1 Direct Recruitment; Merit - Wider choice.

A. 2 Money market; Reason - Working capital requirements are for short term.

A. 3 Vestibule training (with explanation).

A. 4 Critical point control; Increase in cost of raw materials by 2% is more critical.

A. 5 Informal Communication; Rumours and Informal discussion.

A. 6 Motivation can be either positive or negative; Autocratic leadership style.

OR

Features of motivation:

1) Motivation is an internal feeling: The urge, drives, desires, needs of human beings, are internal
which influence human behaviour. For ex: people may have the urge or need for possessing a
motorbike or a house etc.

2) Goal directed behaviour: For ex; the promotion in the job may be given to employee with the
objective of improving his performance. It helps to produce goal directed behaviour.

3) Positive & Negative: Positive motivation provides rewards like pay, promotion etc. Negative
motivation uses negative means like punishments, stopping increments etc.

4) Complex Process: The individuals are heterogeneous in their expectations, perceptions and
reactions. Any type of motivation may not have a uniform effect on all the members. (any 3)

A. 7 1) Scale of operations, 2) Financial alternatives, 3)Growth prospects, etc.

A. 8 Controlling; 1) Goal- oriented function, 2) Pervasive function, etc.

A. 9 Explanation of the three tier redressal agency.

A. 10 Approach the consultant; 1) Offer through prospectus, 2) Offer for sale, 3) Private placement, 4)
Rights issue, etc.

A. 11 Staffing; Importance - (i) Helps in discovering and obtaining competent personnel for various
jobs;

(ii) Makes for higher performance, by putting right person on the right job;

(iii) Ensures the continuous survival and growth of the enterprise through the succession planning for
managers;

(iv) Helps to ensure optimum utilisation of the human resources. By avoiding over manning, it
prevents under-utilisation of personnel and high labour costs. At the same time it avoids disruption of
work by indicating in advance the shortages of personnel; and
(v) Improves job satisfaction and morale of employees through objective assessment and fair
rewarding of their contribution. (any 4)

A. 12 Dividend decision; Factors - 1) Earnings, 2) Stability of earnings, 3) Stability of Dividends,

OR

Company should prefer debt to raise funds..... (1 mark)

ROI > Rate of interest = 14% > 10%......(calculation....2 marks)

ROI < Rate of interest = 6% < 10%.........(calculation...2 marks)

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