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GCE A LEVEL

A510U10-1

BUSINESS – A level component 1Business Opportunities and Functions

THURSDAY, 7 JUNE 2018 – AFTERNOON

2 hours 15 minutes

S18-A510U10-1

ADDITIONAL MATERIALS

A calculator.

INSTRUCTIONS TO CANDIDATES

Use black ink or black ball-point pen. Do not use pencil or gel pen. Do not use correction fluid.Write your name, centre number and candidate number in the spaces at the top of this page.Answer all questions.Write your answers in the spaces provided in this booklet. If you run out of space, use the continuation pages at the back of the booklet, taking care to number the question(s) correctly.

INFORMATION FOR CANDIDATES

The number of marks is given in brackets at the end of each question or part-question.You are reminded of the necessity for good English and orderly presentation in your answers.

For Examiner’s use only

Question MaximumMark

MarkAwarded

Section A 1. 3

2. 6

3. 9

4. 9

Section B 5. 7

6. 12

7. 8

8. 14

9. 12

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Answer all the questions in the spaces provided.

SECTION A

1. Give one example of a business using batch production and describe two benefits of this method of production. [3]

2. (a) Outline the meaning of the term external economies of scale. [2]

(b) Suggest two ways in which an IT company can benefit from external economies of scale. [4]

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3. Geoff Matthews is the production director of Twinkly Toys Ltd. The company manufactures toys based on children’s TV characters. Most of the toys are sold as presents for children at Christmas time.

It is part of Geoff’s job to make sure that the factory has sufficient supplies of the fleecy fabric that is used to produce the toys. The fabric is quite delicate and needs to be stored and handled carefully.

The stock control diagram below shows the pattern of the company’s stockholding for the last twelve weeks.

Stock level

(a) Use the diagram to:

(i) state the lead time [1]

(ii) identify the minimum stock level [1]

(iii) calculate the reorder quantity in weeks 1 to 10 [1]

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Rolls of fabric

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(b) With reference to the diagram, explain what happened during week 11 and explain its possible cause. [2]

(c) Explain why it is important for Twinkly Toys to carefully control its stock. [4]

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4. A few years ago Ella James started her business making organic soups in her own kitchen which she sold to friends and neighbours. As the business grew she started to sell her soups to local shops and she has now reached the stage where she can no longer manage in her own kitchen and she needs to move into a purpose built factory. When she moves she intends to employ two people to help her, even though she still intends to operate as a sole trader.

Ella has retained some profit from previous years but will need to raise some additional finance in order to purchase the factory and the new machinery that she requires.

(a) Identify one source of finance that would be suitable for Ella’s business and one source of finance that would not be suitable, stating the reason why in each case. [4]

Ella has calculated that her monthly fixed costs will be £1 800. She sells her soup for £1.15 a carton.

The variable costs per carton are:

raw materials 45p labour 20p

(b) Calculate her breakeven output per month (show your workings). [2]

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Ella estimates her annual sales for next year will be 50 000 cartons of soup.

(c) Calculate her estimated profit or loss for next year. [3]

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SECTION B

5. According to the Social Enterprise UK website there are approximately 70 000 social enterprises in the UK contributing £18.5 billion a year to the UK economy and employing almost a million people.

The Big Issue, the Eden Project and Jamie Oliver’s restaurant ‘Fifteen’ are examples of social enterprises. So are award-winners Divine Chocolate, a Fairtrade chocolate company co-owned by the cocoa farmers co-operative KuapaKokoo in Ghana and Timewise, an organisation which connects professionals with flexible employment opportunities.

Social enterprises operate in a range of industries:

• Cafedirect is the UK’s largest Fairtrade hot drinks company• The Elvis & Kresse Organisation takes industrial waste materials, turns them into stylish

luggage and hand bags and donates 50 % of the profits to the Fire Fighters Charity• Hill Holt Wood educates at-risk youths in an ancient woodland • Central Surrey Health is a pioneering social enterprise in the healthcare world that is run

by the nursing and therapy teams it employs.

Discuss the ways in which social enterprises differ from other private sector businesses. [7]

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6. The airline industry has been described as an oligopoly. The chart below gives details of the market share of the top European airlines.

30.2 % Other

4.2 % Virgin Atlantic Airways

4.3 % British Airways

4.5 % Lufthansa9.3 % Flybe

10.4 % easyJet

11.6 % Jet2.com

11.9 % Monarch Airlines

13.6 % Ryanair

Source: IATA

(a) With reference to the information in the chart, describe the main features of an oligopoly. [4]

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(b) Discuss the ways that the various airlines might compete with each other apart from cutting their prices. [8]

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7. Despite equal opportunities legislation in the UK, women in full-time work are still paid 13.9 % less than men working the same hours.

Evaluate the impact of equal opportunities legislation on employers and employees in the UK. [8]

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8. Polo mints were first manufactured in the United Kingdom in 1948 at the Rowntree’s factory, in York. The brand is now owned by Nestlé. Polos have had an exceptionally long life cycle which has resulted in a consistent flow of cash over the years.

(a) With the aid of a diagram, describe the relationship between a product’s life cycle and its cash flow. [4]

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Over the years Polo mints have been altered and developed. There have been changes in packaging, flavours and size as well as changes in ingredients in order to ensure that they do not contain any artificial flavours or colouring.

(b) Discuss the importance of extension strategies in the life cycle of Polo mints. [10]

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9. The following report appeared on the BBC website.

Fancy working from home? Wishing you could drop down to a four-day week?

Well, don't just sit there. Ask! From now on, providing you are a UK employee, you will have a legal right to request this, and your employer will have a legal obligation to answer. And not just that – they will have a legal obligation to provide a valid reason if they cannot say yes.

Until now, parents of children under the age of 16, and those registered as carers for children or adults have had the right to ask for a change in work patterns that better suits their home life. But now the same rules will apply to all employees, regardless of their dependants, provided they have worked for their employer for at least 26 weeks.

Source: www.bbc.co.uk

Discuss the view that flexible working will benefit both employers and employees. [12]

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GCE A LEVEL - Revision World