Centre Number
Candidate Number
General Certificate of Secondary Education
2016
Business Studies
Unit 2
Business Development *GBS21*
[GBS21] *GBS21*
FRIDAY 10 JUNE, AFTERNOON
TIME
1 hour 40 minutes.
INSTRUCTIONS TO CANDIDATES
Write your Centre Number and Candidate Number in the spaces provided at the top of
this page.
You must answer the questions in the spaces provided.
Do not write outside the boxed area on each page or on blank pages.
Complete in blue or black ink only. Do not write with a gel pen.
Answer all three questions.
INFORMATION FOR CANDIDATES
The total mark for this paper is 90.
Quality of written communication will be assessed in Questions 1(f), 2(c) and 3(c).
Figures in brackets printed down the right-hand side of pages indicate the marks awarded
to each question or part question.
9963
*20GBS2101*
*20GBS2101*
Answer all questions
1
Rob and Max own a successful sports shop named ‘‘A Sporting Chance’’
in Portstewart. They wish to employ a Sales Manager for the shop.
(a) Rob and Max decided to use internal recruitment to fill the post. Explain one
advantage and one disadvantage for A Sporting Chance of this decision.
Advantage _______________________________________________________
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Disadvantage ____________________________________________________
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9963
*20GBS2102*
*20GBS2102*
(b) Each applicant has been asked to write a Letter of Application. Explain one
advantage and one disadvantage for the employers of a Letter of Application.
Advantage_______________________________________________________
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Disadvantage_____________________________________________________
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[Turn over
9963
*20GBS2103*
*20GBS2103*
(c) Training will be provided in a Sales Training Centre for the new Sales Manager.
Name this type of training and describe one benefit and one drawback it might
have for A Sporting Chance.
Type of Training __________________________________________________
Benefit __________________________________________________________
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Drawback _______________________________________________________
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9963
*20GBS2104*
*20GBS2104*
(d) A Sporting Chance operates a system of both financial and non-financial
motivation. Name, and describe one financial and one non-financial method of
motivation which would be the most suitable for the new Sales Manager.
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[Turn over
9963
*20GBS2105*
*20GBS2105*
(e) State when the new Sales Manager must be given his/her Contract of
Employment, and name four details which should be included in a Contract
of Employment.
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______________________________________________________________ [5]
9963
*20GBS2106*
*20GBS2106*
(f) Observation is the method of appraisal which is used in A Sporting Chance.
Describe this method and explain two of its advantages.
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[Turn over
9963
*20GBS2107*
*20GBS2107*
2
“A Sporting Chance” continues to be successful, so Rob and Max plan to expand
their business by buying another similar business whose owner is retiring soon.
(a) One benefit of growth and expansion is Economies of Scale. Explain what is
meant by ‘‘Economies of Scale’’ and give one example how Economies of Scale
may occur when A Sporting Chance expands.
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9963
*20GBS2108*
*20GBS2108*
(b) Analyse two other benefits for the owners which should result from the growth
of A Sporting Chance.
1. ______________________________________________________________
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2. ______________________________________________________________
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[Turn over
9963
*20GBS2109*
*20GBS2109*
(c) Analyse two positive and one negative social/moral implications of the growth of
A Sporting Chance.
1. Positive Implication ______________________________________________
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2. Positive Implication______________________________________________
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3. Negative Implication _____________________________________________
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9963
*20GBS2110*
*20GBS2110*
(d) Rob and Max have asked the bank for a loan to buy the second shop.
The Bank Manager has asked to see their Business Plan. Give details of two
other reasons why A Sporting Chance should have a Business Plan.
1. ______________________________________________________________
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2. ______________________________________________________________
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(e) Rob and Max are considering using e-commerce as a means of further growth.
Explain the meaning of e-commerce.
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[Turn over
9963
*20GBS2111*
*20GBS2111*
(f) Analyse three advantages for A Sporting Chance of using e-commerce.
1. ______________________________________________________________
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2. ______________________________________________________________
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3. ______________________________________________________________
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9963
*20GBS2112*
*20GBS2112*
(g) Analyse three disadvantages for A Sporting Chance of using e-commerce.
1. ______________________________________________________________
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2. ______________________________________________________________
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3. ______________________________________________________________
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[Turn over
9963
*20GBS2113*
*20GBS2113*
3
The accounts for A Sporting Chance have been prepared by Samantha.
(a) Samantha has drawn up the following Cash Flow Forecast for the three months
from June to August 2016.
Receipts June July August
£ £ £
Opening Balance 46 000 53 006
Sales 32 956 30 376
Total Receipts 74 670 74 938
Payments
Rates 600 600 600
Advertising 750 1400 0
Insurance 200 200 200
Purchases 19 550 9375
Telephone 630 0 0
Cleaning 250 250 250
Wages 3000 3000 3000
Shop Fittings 0 16 400 0
Total Payments 21 664 41 400
Closing Balance 53 006 61 513
Calculate the following amounts and complete the Cash Flow Forecast:
Total Sales for June _____________________________________________ [1]
Total Purchases for June__________________________________________ [1]
Total Receipts for July ____________________________________________ [1]
Closing Balance for July/Opening Balance for August ___________________ [1]
Total Payments for August_________________________________________ [1]
9963
*20GBS2114*
*20GBS2114*
(b) Compare the opening cash balance in June with the closing cash balance in
August, and comment on the expected performance of A Sporting Chance.
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[Turn over
9963
*20GBS2115*
*20GBS2115*
(c) Analyse three consequences for A Sporting Chance if the Cash Flow Forecast is
prepared incorrectly.
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9963
*20GBS2116*
*20GBS2116*
(d) A Sporting Chance is situated in the street between a jewellery shop called
‘‘Jewels’’ and a fruit and vegetable shop called ‘‘Five-a-Day’’. The following table
shows the Rate of Stock Turnover for each of the three shops. Complete the
following table with the name of the appropriate shop opposite its rate of stock
turnover.
Rate of stock turnover Shop
290 times
1.5 times
5 times
[3]
(e) On 31 December 2015, Samantha produced an Income Statement for the year.
Study the Income Statement and answer the questions which follow.
INCOME STATEMENT OF A SPORTING CHANCE
FOR THE YEAR ENDED 31 DECEMBER, 2015
£ £
Sales 120 000
Less Cost of Sales:
Opening Inventory 13 200
Plus Purchases 66 800
80 000
Less Closing Inventory 11 300
Cost of Sales 68 700
Gross Profit 51 300
Less Expenses 14 900
Net Profit 36 400
Suggest two ways in which A Sporting Chance might increase its Net Profit.
1. ______________________________________________________________
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2. ______________________________________________________________
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[Turn over
9963
*20GBS2117*
*20GBS2117*
(f) Use the following formula and the figures provided in the Income Statement
to calculate the Net Profit Percentage for A Sporting Chance. Show your
calculation (correct to one decimal place) in the space provided.
Net Profit
Net Profit Percentage = × 100
Sales
Net Profit Percentage = × 100
Net Profit Percentage =
[2]
9963
*20GBS2118*
*20GBS2118*
(g) A Sporting Chance is described as a successful sports shop. Using all the
information which you have about the business analyse two signs of its success.
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THIS IS THE END OF THE QUESTION PAPER
9963
*20GBS2119*
*20GBS2119*
DO NOT WRITE ON THIS PAGE
For Examiner’s
use only
Question
Marks
Number
1
2
3
Total
Marks
Examiner Number
Permission to reproduce all copyright material has been applied for.
In some cases, efforts to contact copyright holders may have been unsuccessful and CCEA
will be happy to rectify any omissions of acknowledgement in future if notified.
9963/3
*20GBS2120*
*20GBS2120*
