The Scots College

2012

Trial Examination

Business Studies

Section I - Total marks (20)

General Instructions • Attempt questions 1 – 20
• Allow about 35 minutes for this
• Reading time – 5 minutes section

• Working time – 3 hours

Section II - Total marks (40)
• Board-approved calculators may be
• Attempt questions 21 – 25
used
• Allow about 80 minutes for this
• Write using blue or black pen
section
• Write your student number in the
spaces provided Section III - Total marks (20)
• Attempt question 26

• Allow about 35 minutes for this

section
Section IV - Total marks (20)
• Attempt question 27 or question
28

• Allow about 35 minutes for this

section

Disclaimer
Every effort has been made to prepare this Examination in accordance with the Board of Studies documents. No guarantee or warranty is made or
implied that the Examination paper mirrors in every respect the actual HSC Examination question paper in this course. This paper does not
constitute ‘advice’ nor can it be construed as an authoritative interpretation of Board of Studies intentions. No liability for any reliance, use or
purpose related to this paper is taken. Advice on HSC examination issues is only to be obtained from the NSW Board of Studies. The publisher does
not accept any responsibility for accuracy of papers, which have been modified.
PLEASE NOTE – THE FORMULAS WILL NOT APPEAR ON THE HSC PAPER.
Section I

Total marks (20)

Attempt Questions 1 – 20
Allow about 35 minutes for this section.

Use the multiple-choice answer sheet.

Select the alternative A, B, C or D that best answers the question. Circle the letter completely.
If you think that you have made a mistake, put a cross through the incorrect answer and circle the
new answer.

1. Effective supply chain management requires

(A) good planning

(B) a positive trusting relationship with suppliers
(C) low costs
(D) outsourcing

2. Jan Phillips is the team-leader in charge of Research and development at Tyre House,
his focus at the moment is on dependability. This is an example of

(A) a product feature

(B) an operations strategy
(C) the firms mission statement
(D) quality assurance

3. An example of quality management in a biscuit manufacturer would be

(A) storage
(B) batch testing
(C) just in time
(D) logistics
4. Ian Botting is the owner of an opal mine at Lightening Ridge. The waste element from the
mining process is technically considered to be

(A) a cost
(B) an output
(C) a throughput
(D) an input

5. Wendy and Stuart Jones, own a fishing lease in Macquarie Harbour in Tasmania. They farm
ocean trout, and market it as sustainably produced. This implies that they

(A) spend a lot of money on fish feed

(B) sell their fish to fancy restaurants
(C) have a fixed production level
(D) make as little impact on the natural environment as possible

6. Belissa Provess is the owner of 7 Sunglass Huts in Metropolitan Sydney. She has a store
manager for each outlet. These managers are responsible for staff rosters and weekly reports
on “their” store. Belissa’s leadership style can be described as

(A) effective
(B) selective
(C) autocratic
(D) consultative

7. Jennohah Jones has been recruited to work in Blomfelds Brokerage firm. Jennohah always
came first or second in her courses at University, and was head hunted by all the large firms
in Melbourne. To attract her, Blomfelds had to offer her the chance to nominate which area
of broking she wanted to work in. This is an example of

(A) incentive
(B) non-monetary reward
(C) training
(D) bonus

8. Firms that have staff turnover at above industry standards should

( A) become the industry leader

(B) consider acquisition strategies
(C) look at moving offshore for production
(D) outsource as much as possible
9. KC’s Carpentry has not paid their staff for 4 weeks, even though the normal pay period is 2
weeks. KC has explained in a text message – that staff cannot be paid until a client has paid
his bill. Understandably the staff are upset, and are considering walking off the job. The
cause of this dispute would be

(A) wage demands

(B) working conditions
(C) management policy
(D) low morale

10. The type of employment that offers most flexibility to businesses is

(A) part-time
(B) fulltime
(C) casual
(D) contracted

11. Cabatan Engineering Ltd has made a commitment to its shareholders that it will repay all of
the borrowings for its new building in the 5 years. The financial objective that Cabatan
Engineering Ltd is aiming to achieve is:

(A) profitability
(B) growth
(C) liquidity
(D) solvency

12. Special Sports Tours (SST) has made its slogan ‘Live it while you can!’ Which marketing
strategy is SST using?

(A) Price
(B) Place
(C) Product
(D) Promotion
13. Molly imports T-Shirts. She sells them to department stores and clothes shops. Which channel
choice best describes Molly’s distribution choice?

(A) Intensive
(B) Selective
(C) Exclusive
(D) Extensive

14. Nick owns a chain of sports stores. He recently modified his marketing strategy to allow
customers to purchase via the Internet.
Which of the following is an internal factor that may have influenced this decision?

(A) Strategies adopted by competitors to increase market share

(B) Advance in Internet technology with online purchasing facilities
(C) Difficulty in recruiting suitable staff with relevant product knowledge
(D) The recent employment of a marketing manager with new ideas.

15. A business is offering next day delivery of cleaned and scaled fish to restaurants.
What type of market is the business targeting?

(A) Consumer
(B) Intermediate
(C) Resource
(D) Wholesale

16. Which of the following is an example of price discrimination?

(A) Advertising free installation but charging a fee

(B) Charging consumers for an extended warranty period
(C) Offering pensioner’s cheaper prices than non-pensioners
(D) Selling at the retail price imposed by the manufacturer

17. Sonic Soda has started to export. Their Australian bank sends the ownership documents to the
importers bank. The importers bank releases these documents when the importer has paid.
This method of payments is best known as

(A) payment in advance

(B) a letter of credit
(C) clean payment
(D) bills of exchange
18.
Logistical Solutions Transport King
Annual sales $850,000 $2,100,000
Net profit $150,000 $290,000
Accounts recievable $130,000 $240,000

From this information you could conclude that:

(A) Logistical Solutions is more profitable than Transport King but less efficient.
(B) Transport King is more profitable than Logistic Solutions but less efficient.
(C) Transport King is both more profitable and efficient than Logistic Solutions
(D) Logistic Solutions is both more profitable and efficient than Transport King

19. Non bank financial intermediaries that are regulated by APRA and provide smaller scale
finance are best known as:

(A) Investment Banks

(B) Finance and Insurance Companies
(C) Superannuation Funds
(D) Unit Trusts

20. Auditors would examine the financial reports of a business to identify if:

(A) the business is a good investment

(B) there is inefficient use of resources and/or misuse of funds
(C) the business follows the matching principle
(D) customer relations
 Section III
EXTENDED RESPONSE
20 marks
Attempt Question 26
Allow about 35 minutes for this section

Answer the question in a writing booklet. Extra writing booklets are available.

In your answer you will be assessed on how well you:

demonstrate knowledge and understanding relevant to the question
apply the hypothetical business situation
Communicate using relevant business terminology and concepts
Present a sustained, logical and cohesive response in the form of a business report

More Farms Vie for the $1 Billion Spent at Farmers' Markets

For decades, Beechwood Orchards sold its apples, peaches, and other fruits and veggies to wholesalers, who would then
consolidate the produce with shipments from other farms and dispatch it to supermarkets across the region. These days,
Beechwood is more often cutting out the middlemen. The orchard’s owners, Melissa Allen and her brother, now travel to
as many as 14 farmers’ markets a week in places up a three-hour drive away. The family gets about half its revenue
from direct sales to consumers. “It’s a new way to do things at a farm that has been around 100 years,” says Allen, the
fifth generation of her family to work the soil at Beechwood.
Write your answer in report style

Recommend ONE (1) place and ONE (1) process marketing strategy that could be used to achieve
differentiation.
Describe one ethical consideration that this firm will need to consider.
Outline appropriate training methods for 2 types of BEECHWOOD ORCHARDS employees.
Section IV
20 marks
Attempt Question 27 OR 28
Allow about 35 minutes for this section

Answer the question in a writing booklet. Extra writing booklets are available.

In your answer you will be assessed on how well you:

• demonstrate knowledge and understanding relevant to the question

• apply relevant business case study/studies and contemporary business issues
• communicate using relevant business terminology and concepts
• present a sustained, logical and cohesive response

________________________________________________________________

27.Explain how new product design affects a businesses cash flow

management.

Or

28. Explain how outsourcing can affect a businesses’ profitability.

 Student number_____________________

Section II - Total marks (40)

• Attempt questions 21 – 26
• Allow about 80 minutes for this section

21 22 23 24 25
/6 /4 /10 /10 /10
Question 21

Examine the following financial data.

Projected Cash Flow for Shire Souvenirs for 1st Qtr 2012
January February March
$ $ $

Opening Balance 4,000

Cash Sales 20,000 25,000 25,000
Receipts from 10,000 6,000 15,000
Debtors
Wages 5,000 5,000 5,000
Cash Purchases 15,000 20,000 20,000
Payments to 2,000 6,000 2,000
Creditors
Electricity - 2,000 -
Annual Insurance - 14,000 -
Closing Balance

Management is concerned about the cash flow situation that the business may be about to face.

a) Identify the first month in which there will be a negative cash balance (2)

b) Evaluate TWO (2) strategies that could be used to manage this situation (4)
Question 22

Examine the following financial data for Miranda Malls.

Closing Stock 46,000

Sales 450,000
Purchases 200,000
Other Expenses 122,000
Opening Stock 52,000

Industry Average:
Gross Profit Ratio 60%
Net Profit Ratio 30%

a) Calculate both the Gross and Net Profit Ratios (2)

b) Comment on the Profitability of Miranda Malls (2)

Question 23
activity task Preceded by Elapsed time
[Minutes]
A weigh ingredients - 1
B mix ingredients A 3
C dough rising time B 60
D prepare tins - 1
E pre-heat oven - 10
F knock back dough and place in tins C+D 2
G 2nd dough rising time F 15
H cooking time E+G 40

a) Identify both the table and the diagram. (2)

If the business considered introducing a machine that could do activities A+B+C

b) Explain TWO (2) likely reasons for resistance to change (4)

c) Suggest TWO (2) quality management methods that could be introduced for quality
improvement (2)
QUESTION 24
The team at Walkers Gardening Centre have suggested running do it yourself
classes. This has been based on observing competitors and the trends in
customer behaviour.

a) Identify a feature of Walkers gardening centre that shows that staff

are valued.(1)

b) Outline 3 strategies that will support the maintenance process of staff

at Walkers.(3)

c) Recommend a dispute resolution process that could be used on site(6)

 Question 25

NuCam produces and markets a digital video camera. This product is in the growth phase of its life
cycle. Management is reviewing the performance of the product on the market. NuCam states that it
wants an ethically responsible marketing campaign to represent their business and improve sales.

a) Compare market and competition based pricing methods for Nucam digital video cameras (2)

b) Explain why Nucam wants ethical marketing (2 marks).

c) Outline e-marketing and describe its advantages for NuCam (2 marks).

d) If Nucam were to sell their digital video cameras overseas, recommend 2 global marketing
strategies they could implement (4 marks).
 Student Number: ________________

Year 12 –Trial
Multiple Choice Answer Sheet

Business Studies

Select the alternative A, B, C or D that best answers the question. Circle the letter completely.
If you think that you have made a mistake, put a cross through the incorrect answer and circle the
new answer.

1. A B C D
2. A B C D
3. A B C D
4. A B C D
5. A B C D
6. A B C D
7. A B C D
8. A B C D
9. A B C D
10. A B C D
11. A B C D
12. A B C D
13. A B C D
14. A B C D
15. A B C D
16. A B C D
17. A B C D
18. A B C D
19. A B C D
20. A B C D

• financial ratios
– Liquidity – current ratio (current assets ÷ current liabilities)
– Gearing – debt to equity ratio (total liabilities ÷ total equity)
– Profitability – gross profit ratio (gross profit ÷ sales); net profit ratio
(net profit ÷ sales); return on equity ratio (net profit ÷ total equity)
– Efficiency – expense ratio (total expenses ÷ sales), accounts
receivable turnover ratio (sales ÷ accounts receivable)