Questions

Q6. Cadbury was founded in 1842 when John Cadbury opened a shop in Birmingham in the UK. The
shop sold cocoa and drinking chocolate. Cadbury is now one of the major chocolate manufacturers in the
world.
In 1918 the first overseas Cadbury factory was opened in Hobart, Tasmania in Australia. Another factory
opened in South Africa in 1938. Cadbury chocolates are sold across the world and other factories have
been opened. Cadbury produces many well-known brands, such as Dairy Milk, Buttons and Crunchie. It
also produces ice cream and cakes.

Cadbury is now part of Mondelez, the largest snack business in the world.
Cadbury wants to appoint committed people who will become valued employees.

State one reason why Cadbury might pay its UK employees above the minimum wage.
Ans) To attract and retain skilled and committed employees.
(Total for question = 1 mark)

State one item of information that may appear in a job description for a Cadbury Production Line
Supervisor.
(1)
Ans) One item of information that may appear in a job description for a Cadbury Production Line
Supervisor is responsibilities for overseeing production line operations and ensuring product quality
standards are met.

State one item of information that an applicant might include in their Curriculum Vitae (CV) when applying
for a position with Cadbury.
(1)
Ans) One item an applicant might include in their CV is work experience in food production or
manufacturing.
(Total for question = 1 mark)
Outline one reason why Cadbury interviews shortlisted candidates for vacancies in its functional areas.
(2)
Ans) One reason Cadbury interviews shortlisted candidates is to assess their suitability for the role by
evaluating their skills, experience ensuring they can effectively contribute to the company’s goals.
(Total for question = 2 marks)

Cadbury wants to retain its skilled employees. To do this it is looking to offer them different ways of
working. It is considering the following two options:

Option 1: allowing employees to work part-time

Option 2: allowing employees to job share.

Justify which one of these two options Cadbury should choose.

(9)
Ans) One advantage of allowing employees to work part-time is that it can greatly enhance employee
satisfaction and retention. By offering flexible schedules, Cadbury can accommodate personal
commitments, leading to a better work-life balance. This satisfaction fosters loyalty, resulting in lower
turnover rates and reduced costs associated with recruiting and training new staff.
Conversely, the opportunity cost of not choosing part-time options is that Cadbury may miss out on
attracting a wider pool of talent, particularly skilled professionals who prefer flexible work. Not providing
part-time roles could limit the diversity of hires, which is vital for fostering innovation and creativity,
ultimately affecting Cadbury's competitiveness in the chocolate industry.

Ultimately, I believe Cadbury should opt for part-time work. This choice directly aligns with its goal of
retaining committed employees and can enhance job satisfaction. Additionally, part-time roles can lead to
a more diverse workforce, bringing in valuable perspectives. However, it depends on Cadbury’s
operational needs to ensure adequate staffing levels. I didn’t choose job sharing because it may
complicate coordination and communication, potentially disrupting productivity.
(Total for question = 9 marks)

Q7. The LEGO Group is a privately-owned business in Denmark. The business was founded in 1932 by
the Kristiansen family. The family still owns it. The name LEGO is an abbreviation of two Danish words,
'leg godt' which means 'play well'. It is now one of the world's largest manufacturers of toys with 15
factories and over 18,000 employees around the world.

LEGO manufactures toys, games and art materials for boys and girls of all ages, and products from films
such as Star Wars and Harry Potter. It believes that children are the role models of the future and playing
with LEGO can support children in a developing and complex world.

LEGO's revenue in 2019 was 38.5 billion DKK. In 2020 it was 40.81 billion DKK.

All 18,000 LEGO employees are full-time.

State one possible reason why LEGO does not recruit casual employees.
(1)
Ans) To maintain consistent quality and expertise in its workforce.
(Total for question = 1 mark)
State one financial objective for LEGO.
(1)
Ans) Increase its annual revenue.
(Total for question = 1 mark)
State one benefit for LEGO of having a short span of control.
(1)
Ans) One benefit for LEGO of having a short span of control is that it allows managers to provide more
effective supervision and support to employees.
(Total for question = 1 mark)
Outline one benefit to LEGO of being a privately-owned family business.
(2)
Ans) One benefit to LEGO of being a privately-owned family business is that it allows for greater control
over decision-making, enabling the company to focus on long-term goals rather than short-term
shareholder demands.
Total for question = 2 marks)

Q15. The LEGO Group is a privately-owned business in Denmark. The business was founded in 1932 by
the Kristiansen family. The family still owns it. The name LEGO is an abbreviation of two Danish words,
'leg godt' which means 'play well'. It is now one of the world's largest manufacturers of toys with 15
factories and over 18,000 employees around the world.
LEGO manufactures toys, games and art materials for boys and girls of all ages, and products from films
such as Star Wars and Harry Potter. It believes that children are the role models of the future and playing
with LEGO can support children in a developing and complex world.

LEGO ensures its employees are fully prepared to carry out the tasks they are employed for. It looks after
and encourages its employees to develop and improve their own skills.

Ensuring that all employees are fully trained is important to LEGO. LEGO makes sure that all employees
are fully trained and skilled to carry out the work. All employees have induction training when they start at
LEGO. Additional training is undertaken by employees as they progress through the business. LEGO is
considering the following two options to carry out this additional training.

Option 1: on-the-job training

Option 2: off-the-job training.

Justify which one of these two options LEGO should choose.

One advantage of on-the-job training for LEGO is that it allows employees to learn in a practical
environment, applying skills directly to real tasks. This hands-on approach helps them adapt quickly while
becoming familiar with the company's processes. Additionally, training alongside experienced colleagues
fosters teamwork and enhances communication, leading to increased productivity.

Conversely, the opportunity cost of not choosing off-the-job training is the potential loss of specialized
knowledge that comes from external programs or workshops. These off-site training options often expose
employees to industry best practices and innovative techniques, which could limit creativity and
innovation in LEGO’s product development.

Ultimately, I believe LEGO should opt for on-the-job training. This choice provides practical experience
and fosters a cohesive work environment, aligning with LEGO's focus on skill development. Moreover, it
can be more cost-effective as it utilizes existing resources. However, this depends on LEGO ensuring that
current employees can effectively train others. I didn't choose off-the-job training because it can be more
expensive and time-consuming, potentially disrupting daily operations.
(9)
(Total for question = 9 marks)
Q16. Explain one reason why a business would pay its employees above the minimum wage.
(3)
Ans) LEGO pays its employees above the minimum wage to attract and retain skilled workers in a
competitive job market, making the company more appealing to talented candidates. This practice also
enhances employee satisfaction and loyalty, reducing turnover and saving costs on recruitment and
training. Additionally, higher wages boost motivation and productivity, as employees who feel valued are
more engaged in their work, contributing to LEGO's overall success.
(Total for question = 3 marks)
Q17. Explain one reason why a business has fully trained employees.
(3)
Ans) A business has fully trained employees to ensure high productivity and efficiency. Well-trained
workers possess the skills needed to perform tasks effectively, reducing errors and improving work
quality. This results in smoother operations, better customer service, and increasing profit.
(Total for question = 3 marks)

Q18. Explain one reason why a business complies with health and safety legislation.
(3)
Ans) A business complies with health and safety legislation to protect employees and reduce the risk of
workplace accidents and injuries. Adhering to these laws allows a safer work environment, boosts
employee’s productivity and increases the company’s long-term success.
 (Total for question = 3 marks)
Q19. Explain one advantage for businesses if banks reduce their interest rates.
(3)
Ans) One advantage for businesses if banks reduce their interest rates is that it lowers the cost of
borrowing. With lower interest rates, businesses can take out loans more affordably, enabling them to
invest in expansion, purchase new equipment, or fund operations. This can lead to increased growth and
profitability.
(Total for question = 3 marks)
Q20. Define the term public corporation.
(1)
Ans) A public corporation is a government-owned that operates to provide services or goods to the public
and is funded by tax, rather than through private profit motives.
(Total for question = 1 mark)
Q21. Define the term sole trader.
(1)
Ans) A sole trader is a type of business ownership where an individual operates and owns the business
independently, retaining all profits and having full responsibility for its debts and liabilities.
(Total for question = 1 mark)
Q22. Define the term break-even.
(1)
Ans) Break-even refers to the point at which total revenues equal total costs, resulting in neither profit nor
loss for a business.
(Total for question = 1 mark)
Q23. The LEGO Group is a privately-owned business in Denmark. The business was founded in 1932 by
the Kristiansen family. The family still owns it. The name LEGO is an abbreviation of two Danish words,
'leg godt' which means 'play well'. It is now one of the world's largest manufacturers of toys with 15
factories and over 18,000 employees around the world.

LEGO manufactures toys, games and art materials for boys and girls of all ages, and products from films
such as Star Wars and Harry Potter. It believes that children are the role models of the future and playing
with LEGO can support children in a developing and complex world.

In 2019 LEGO had current assets of 34 946 million DKK and current liabilities of 12 763 million DKK.

Calculate, to two decimal places, the current ratio in 2019. You are advised to show your working.
(2)

(Total for question = 2 marks)

Q24.

Cadbury is part of the multinational Mondelez business. In 2017 Mondelez had a gross profit of $10.3
million and a revenue of $25.9 million.
Calculate, to two decimal places, the gross profit margin. You are advised to show your working.

(2)

(Total for question = 2 marks)

Q25. Cadbury makes a chocolate cake for £6.50. A tax of 20% is added to give the selling price.
Calculate the selling price of the chocolate cake. You are advised to show your working.

(2)
(Total for question = 2 marks)

Q26. The LEGO Group is a privately-owned business in Denmark. The business was founded in 1932 by
the Kristiansen family. The family still owns it. The name LEGO is an abbreviation of two Danish words,
'leg godt' which means 'play well'. It is now one of the world's largest manufacturers of toys with 15
factories and over 18,000 employees around the world.
LEGO manufactures toys, games and art materials for boys and girls of all ages, and products from films
such as Star Wars and Harry Potter. It believes that children are the role models of the future and playing
with LEGO can support children in a developing and complex world.

LEGO's revenue in 2019 was 38.5 billion DKK. In 2020 it was 40.81 billion DKK.

Analyse the benefits for LEGO of being a multinational business.

(6)
Ans) One benefit for LEGO of being a multinational business is the ability to diversify its revenue streams,
which mitigates risks associated with reliance on a single market. By operating in multiple countries,
LEGO can adapt its products to meet local preferences and demands, leading to increased customer
satisfaction and potentially higher sales. This geographical spread also allows LEGO to offset economic
downturns in specific regions, ensuring more stable overall revenue.

Another significant advantage of LEGO’s multinational status is the opportunity to achieve economies of
scale in production and distribution. By manufacturing in various locations, LEGO can optimize its supply
chain, reduce costs, and increase efficiency as production volume rises. This cost reduction enables
LEGO to invest more in research and development, fostering innovation and maintaining its competitive
edge in the toy industry while simultaneously improving profit margins.
(Total for question = 6 marks)

Q27. Cadbury was founded in 1842 when John Cadbury opened a shop in Birmingham in the UK. The
shop sold cocoa and drinking chocolate. Cadbury is now one of the major chocolate manufacturers in the
world.

In 1918 the first overseas Cadbury factory was opened in Hobart, Tasmania in Australia. Another factory
opened in South Africa in 1938. Cadbury chocolates are sold across the world and other factories have
been opened. Cadbury produces many well-known brands, such as Dairy Milk, Buttons and Crunchie. It
also produces ice cream and cakes.

Cadbury is now part of Mondelez, the largest snack business in the world.

Analyse two factors that could influence Cadbury when locating a new factory.
(6)
Ans) One factor that could influence Cadbury when locating a new factory is access to raw materials.
Being a chocolate manufacturer, Cadbury relies heavily on ingredients such as cocoa, sugar, and dairy
products. Establishing a factory near suppliers of these key raw materials can reduce transportation costs
and ensure a steady supply chain. Additionally, proximity to raw material sources can lead to fresher
ingredients, which may enhance product quality and reduce overall production costs.

Another important factor is the local market demand for Cadbury products. Before choosing a location for
a new factory, Cadbury would analyze the potential consumer base in the area to determine whether
there is sufficient demand for its products. Establishing a factory in a region with high demand can not
only increase sales but also allow for quicker distribution to customers. Furthermore, being closer to key
markets can enhance Cadbury's responsiveness to consumer preferences and trends, ultimately leading
to greater customer satisfaction and loyalty.
(Total for question = 6 marks)