GCSE BUSINESS STUDIES
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1 Please write clearly in block capitals. Centre number Candidate number Surname Forename(s) Candidate signature GCSE BUSINESS STUDIES Unit 1 Setting up a Business Wednesday 24 May 2017 Morning Time allowed: 1 hour Materials For this paper you may use: a calculator. Instructions Use black ink or black ball-point pen. Fill in the es at the top of this page. Answer all questions. You must answer the questions in the spaces provided. around each page or on blank pages. For Examiner s Use Question Mark TOTAL Information The maximum mark for this paper is 60. The marks for each question are shown in brackets. You are reminded of the need for good English and clear presentation in your answers. Quality of Written Communication will be assessed in questions 1(d), 2(d) and 3(c). *jun * IB/G/Jun17/E
2 2 Answer all questions in the spaces provided. Total for this question: 19 marks 1 Read Item A and then answer the questions that follow. Item A Charlie s paintings Charlie had always been good at Art and it was his best subject at school. During his 3 years at university, as well as studying, he produced and sold some paintings as a hobby. These were sold through word of mouth recommendation. Charlie prefers to paint abstract pictures but paintings of local views are more popular. (See Table 1 below.) Table 1 Charlie s paintings sold while he was a student Type of painting Number produced Number sold Cost of materials Average selling price Small local views Large local views Large abstract Having just finished university, Charlie is now interested in setting up his own business. He realises that, for his business to be successful, he will need to get his prices right. He also thinks that it would be a good idea to have a website. *02*
3 3 1 (a) Explain one way in which Charlie could measure the success of his business. [2 marks] 1 (b) Explain two benefits to Charlie of having a website. [4 marks] Benefit 1 Benefit 2 Question 1 continues on the next page *03* Turn over
4 4 1 (c) Using Item A, explain why Charlie might need to change the types of painting he produces. [4 marks] 1 (d) Charlie wants to research how he can sell more paintings and how much he should charge for them. Advise him on the best way to carry out this research. Give reasons for your advice. [9 marks] *04*
5 5 19 Turn over for the next question *05* Turn over
6 6 2 Read Item B and then answer the questions that follow. Total for this question: 24 marks Item B Sheds-U-Like Ltd Sheds-U-Like Ltd was set up 5 years ago to provide good quality sheds at reasonable prices. The business uses job production for its profitable design and make service. It also produces a range of standard-size garden sheds using batch production. Sheds-U-Like Ltd has grown steadily and now employs 15 workers who are low skilled and paid the minimum wage. It is based in a small industrial unit and offers a free delivery service. This year Sheds-U-Like Ltd has faced increased competition from a large national manufacturer and sales have fallen. The business does not want to make workers redundant so it has decided to produce more of the most popular sheds. These sheds are then stored in a rented warehouse until customers can be found. The manager is concerned about falling profits and poor cash flow. The company is already close to its overdraft limit. There have also been complaints recently about the quality of the standard sheds and these have often led to refunds. The manager is worried that fear of redundancies is affecting the motivation of the workers. *06*
7 7 2 (a) State and explain two advantages to Sheds-U-Like Ltd of using job production. [4 marks] Advantage 1 Advantage 2 Question 2 continues on the next page *07* Turn over
8 8 2 (b) Explain two possible solutions to Sheds-U-Like Ltd s cash flow problems. [6 marks] Solution 1 Solution 2 *08*
9 9 2 (c) Explain one benefit to Sheds-U-Like Ltd of being a private limited company. [5 marks] Question 2 continues on the next page *09* Turn over
10 10 2 (d) The manager of Sheds-U-Like Ltd wants to increase the motivation of the workers. She is considering: a small increase in financial rewards giving the workers more responsibility. Recommend the best method of increasing the motivation of the workers. Give reasons for your recommendation. [9 marks] *10*
11 11 24 Turn over for the next question *11* Turn over
12 12 3 Read Item C and then answer the questions that follow. Total for this question: 17 marks Item C NE Cycles Katie and David like cycling. They live in an attractive tourist area and use their bikes for leisure and travelling to work. They have noticed a gap in the leisure market for bike rental that includes a delivery and collection service. Katie and David have decided to set up a bike rental business to meet this gap in the market. A local charity has offered to give Katie and David a grant to buy the bikes they need. The charity has said that the grant will be available to them for the next 3 months. If they do not take up the offer in this period they would have to re-apply. Katie says that they should not just be covering the cost of the bikes but that they would also need equipment, a garage, and some extra funds to get them started. She thinks that they would need the grant and also a short-term loan of David wants to get started whilst the weather is good during the summer. Katie believes that there is a lot of research and planning still to do if the business is going to be low risk and successful. *12*
13 13 3 (a) Explain two ways in which consumer protection would apply to customers if they rented bikes from NE Cycles. [4 marks] (b) They plan to have 10 bikes. Katie thinks they should charge 10 a day per bike. They expect to rent each bike for an average of 25 days a month. Katie has calculated the costs for maintenance and the delivery service to be a total of 750 a month. Calculate NE Cycles expected monthly profit. [4 marks] Expected monthly profit Workings *13* Turn over
14 14 3 (c) Katie and David disagree about when the business should start. Using Item C, advise them on when the best time to start would be. Give reasons for your advice. [9 marks] *14*
15 15 17 END OF QUESTIONS *15*
16 16 There are no questions printed on this page DO NOT WRITE ON THIS PAGE ANSWER IN THE SPACES PROVIDED Copyright information For confidentiality purposes, from the November 2015 examination series, acknowledgements of third party copyright material will be published in a separate booklet rather than including them on the examination paper or support materials. This booklet is published after each examination series and is available for free download from after the live examination series. Permission to reproduce all copyright material has been applied for. In some cases, efforts to contact copyright-holders may have been unsuccessful and AQA will be happy to rectify any omissions of acknowledgements. If you have any queries please contact the Copyright Team, AQA, Stag Hill House, Guildford, GU2 7XJ. Copyright 2017 AQA and its licensors. All rights reserved. *16*
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