2013 Prelim Past Paper
2013
Higher School Certificate
Preliminary Examination
Business Studies
Total marks – 80
General Instructions
 Reading time – 5 minutes
 Working time – 2 hours
 Board approved calculators may be used
 Write using black or blue pen
 Write your student number and/or name
at the top of every page
Section I – Pages 2–8
20 marks
 Attempt Questions 1–20
 Allow about 25 minutes for this section
Section II – Pages 9–14
40 marks
 Attempt Questions 21–24
 Allow about 1 hour for this section
Section III – Page 15
20 marks
 Attempt Question 25
 Allow about 35 minutes for this section
This paper MUST NOT be removed from the examination room
STUDENT NUMBER/NAME: ……………………..
STUDENT NUMBER/NAME: ……………………..
Section I
20 marks
Attempt Questions 1–20
Allow about 25 minutes for this section
Select the alternative A, B, C or D that best answers the question and indicate your choice with a
cross (X) in the appropriate space on the grid below.
A
B
C
D
A
1
11
2
12
3
13
4
14
5
15
6
16
7
17
8
18
9
19
10
20
Page 2
B
C
D
STUDENT NUMBER/NAME: ……………………..
1
Which of the following is an external influence on the business environment?
(A) Location
(B)
Resources
(C)
Technology
(D) Business culture
2
Businesses are responding to the growing concerns of consumers by ensuring that they are
meeting their present needs, without endangering the ability of future generations to have
the same standard of living.
Which social goal is being addressed?
(A) Community service
(B)
Environmental sustainability
(C)
Provision of goods and services
(D) Provision of social justice
3
Tina works 15 hours per week. She is entitled to sick leave and holiday pay.
What type of employment contract is this?
(A) Permanent part-time
(B)
Permanent full-time
(C)
Casual part-time
(D) Casual full-time
4
Which of the following explains why entrepreneurs would potentially accept high risks?
(A) Higher returns
(B)
Higher inventory prices
(C)
Lower establishment costs
(D) Minimal outsourcing
Page 3
STUDENT NUMBER/NAME: ……………………..
5
Which pricing strategy would best be applied in the establishment stage of a business
entering a market with well-established competitors?
(A) Price competition
(B)
Price penetration
(C)
Below the line pricing
(D) Price skimming
6
The Australian Securities Exchange would influence which type of income, usually
received by investors on a fixed schedule?
(A) Profit
(B)
Rent
(C)
Interest
(D) Dividends
7
Which strategy would help a business move from the maturity stage to the renewal stage of
the business life cycle?
(A) Increasing debt levels, to pay off liabilities
(B)
Reducing the number of products being sold on the market
(C)
Improving their product, to cater for changing tastes and preferences
(D) Decreasing the number of employees, in order to reduce production levels
Page 4
STUDENT NUMBER/NAME: ……………………..
8
Manuel has decided to start his own cleaning business. He aims to service homes and
offices.
In which industry would Manuel be operating?
(A) Primary
(B)
Secondary
(C)
Quaternary
(D) Quinary
9
Which of the following is an advantage of starting a new business, instead of buying an
existing business?
(A) Sales to existing customers will generate instant income.
(B)
Equipment is available for immediate use.
(C)
There are no favours or existing debts for the business to repay.
(D) There is low risk and securing finance is relatively simple.
10
A business requires $20 000 for the purchase of more storage space. Management has
decided to use debt as a source of finance.
Which of the following is a source of debt finance?
(A) Funds obtained from the sale of goods
(B)
Funds obtained from a bank overdraft
(C)
Funds obtained from the sale of shares
(D) Funds obtained from retained profits
Page 5
STUDENT NUMBER/NAME: ……………………..
11
Observe the following information.
Revenue Statement for ‘Book It’ Publishing 2012
Sales
$200 000
Cost of goods sold
$30 000
Administrative Expenses
$5 000
Financial Expenses
$3 000
Opening Stock
$20 000
(Net profit = Gross Profit – Expenses)
What is the net profit for ‘Book It’ Publishing in 2012?
(A) $170 000
(B)
$142 000
(C)
$192 000
(D) $162 000
12
Providing training and mentoring is a responsibility businesses have to which stakeholder?
(A) Employees
(B)
Environment
(C)
Government
(D) Shareholders
13
The Reserve Bank recently decreased interest rates.
Where is this most likely to appear in a SWOT analysis for a business?
(A) Strength
(B)
Weakness
(C)
Opportunity
(D) Threat
Page 6
STUDENT NUMBER/NAME: ……………………..
14
Pierre wants to open a café that specialises in French desserts.
Which of the following is a legal requirement for Pierre?
(A) Registering his establishing costs with the local council
(B)
Ensuring that he has zoning rights from his local council
(C)
Undertaking both internal and external recruitment processes
(D) Obtaining both debt and equity finance, to ensure all liabilities can be paid back
15
An increase in globalisation has resulted in which change to the structure of many
Australian businesses?
(A) An increase in outsourcing
(B)
An increase in social audits
(C)
A longer chain of command
(D) A decrease in autonomous work environment
16
Which of the following statements is true of the business life cycle?
(A) During an economic downturn, consumers increase their spending, resulting in
the business moving to the growth stage.
(B)
During an economic downturn, a business will increase their investment in more
innovative products, resulting in the business moving into the renewal stage.
(C)
During an economic upturn, government spending increases as unemployment rises,
resulting in the business remaining in the maturity stage.
(D) During an economic upturn, consumer spending increases and businesses are more
likely to improve existing products, resulting in the business experiencing growth.
17
Giuseppe’s fruit wholesale business is unable to repay debts and will go into cessation.
Which type of cessation is Giuseppe experiencing?
(A) Bankruptcy
(B)
Involuntary liquidation
(C)
Receivership
(D) Voluntary administration
Page 7
STUDENT NUMBER/NAME: ……………………..
18
One of the functions of managers is to delegate tasks and develop specific strategies to
ensure that these tasks are completed effectively.
Which of the following best describes this function?
(A) Planning
(B)
Evaluating
(C)
Organising
(D) Controlling
19
Which of the following is a strategy that a business can use to avoid overextending its
finances?
(A) Ensuring that JIT is used
(B)
Leasing equipment required
(C)
Investing in research and development
(D) Increasing production, by adopting the latest technology
20
Observe the following information.
Unit price - $50
30 unit sold
Fixed costs $900
Variable cost $30 per unit
Breakeven= Total Fixed Cost ÷ (Unit Price – Variable Cost per Unit)
Which of the following is correct?
(A) Total revenue is $1500 and breakeven is 18 units.
(B)
Total revenue is $900 and breakeven is 45 units.
(C)
Total revenue is $950 and breakeven is 18 units.
(D) Total revenue is $1500 and breakeven is 45 units.
Page 8
STUDENT NUMBER/NAME: ……………………..
Section II
40 marks
Attempt Questions 21–24
Allow about 1 hour for this section
Answer the questions in the spaces provided. These spaces provide guidance for the expected
length of response.
Question 21 (8 marks)
Marks
A business will have a number of goals that it aims to achieve at any one time. The success
of achieving these goals will be influenced by both internal and external factors.
(a)
Outline TWO goals of a business.
1.
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(b)
Describe ONE internal and ONE external influence on a business.
Internal: ..............................................................................................................................
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External: ............................................................................................................................
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Page 9
4
STUDENT NUMBER/NAME: ……………………..
Question 22 (10 marks)
Marks
‘Looks are Me’ beauty salon has recently merged with ‘Hair is Us’ hair salon. The merger
has resulted in conflict in management styles, as ‘Looks are Me’ has been using a classical
approach to management, whilst ‘Hair is Us’ uses a contingency approach.
(a)
(b)
Identify TWO roles of an effective manager.
1.
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2.
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Describe the organisational structure and leadership style adopted under a classical
management approach.
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(c)
Discuss why a contingency management approach may be more suitable for the business.
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Page 10
4
STUDENT NUMBER/NAME: ……………………..
Question 23 (10 marks)
Marks
Observe the following financial statement.
Assets
Current assets
Cash
Accounts receivables
Inventory
Non-current assets
Equipment
Property
Cars
(a)
‘Beck Manufacturing’ Pty Ltd
As at June 30 2012
($)
Liabilities
Current liabilities
1 500
Accounts payable
6 200
Overdraft
14 000
Non-current liabilities
65 000
Mortgage
100 000
22 000
Owner’s equity
Net profit
Capital
($)
9 200
3 300
105 000
?
45 000
Identify this type of financial statement.
1
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(b)
Use the accounting equation (assets = liabilities + owner’s equity) to calculate net profit
for Beck Manufacturing.
3
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(c)
Recommend ONE quality management strategy and ONE promotional marketing
strategy that Beck Manufacturing can use to increase sales and profits.
Quality management strategy: ............................................................................................
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Promotional marketing strategy: ........................................................................................
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Question 23 continues on the next page
Page 11
3
STUDENT NUMBER/NAME: ……………………..
Question 23 (continued)
(d)
Marks
Discuss the impact that staff training can have on both the employee AND the employer.
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End of Question 23
Page 12
3
STUDENT NUMBER/NAME: ……………………..
Question 24 (12 marks)
Marks
‘Electra Electricals’ is a small business that has been operating as a retailer of electrical
appliances for over 6 years. But, during the past 6 months, there has been a fall in sales
and an increase in levels of inventory.
(a)
Define the term small business.
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(b)
Outline TWO contributions that small businesses make to the Australian economy.
1.
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2.
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Question 24 continues on the next page
Page 13
4
STUDENT NUMBER/NAME: ……………………..
Question 24 (continued)
(c)
Marks
Recommend THREE types of corrective actions that management of Electra Electricals
can implement, to increase sales and reduce inventory.
1.
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2.
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3.
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End of Question 24
Page 14
6
STUDENT NUMBER/NAME: ……………………..
Section III
20 marks
Attempt Question 25
Allow about 35 minutes for this section
Answer the question on your own paper or in a writing booklet, if provided.
In your answer you will be assessed on how well you:
 demonstrate knowledge and understanding relevant to the question
 use the information provided
 communicate using relevant terminology and concepts
 present a sustained, logical and cohesive response in the form of a business report
Question 25 (20 marks)
A large manufacturing company has been operating in Australia for over 10 years. During the
past two years, they have experienced an increase in the cost of production, due to a price
increase from suppliers. Sales have fallen and an increase in competition has resulted in the
company losing some of its market share. The board of directors has recently decided to make
their senior managers redundant and appoint new managers to change the direction of the
business. The new managers have decided to implement the following:
 Changing the business plan
 Outsourcing some of their production overseas
 Changing the production methods by using new technology to reduce costs
 Looking for cheaper suppliers to reduce costs
 Reducing the size of the workforce
Assume that you have been hired by the new management team as a business consultant and
have been asked to prepare a report.
Write a report that addresses EACH of the following:
 Outline TWO important skills of management;
 Discuss how they can manage change effectively;
 Evaluate THREE critical issues that contribute to success and failure.
End of paper
Page 15