™

Cambridge IGCSE

BUSINESS STUDIES 0450/22

Paper 2 Case Study February/March 2020
INSERT 1 hour 30 minutes

INFORMATION
• This insert contains the case study.
*8605031596-I*

• You may annotate this insert and use the blank spaces for planning. Do not write your answers on the
insert.

This document has 4 pages. Blank pages are indicated.

co
e.
at
-m
am

03_0450_22_2020_1.11
© UCLES 2020 [Turn over
x
.e
w
w
w
 2

Bright Windows (BW)

Bob recently set up BW, a window washing business after he had been unemployed for 7 months.
Many home owners are extremely busy and find it difficult to find the time to wash the windows in
their houses. Increasing incomes have also led to a high demand for window washing services.
The primary market research carried out by Bob before setting up his business confirmed this high
demand. Bob used sampling when carrying out a questionnaire.

Bob is a sole trader. He invested $2 000 to get his business started and to provide working capital.
He needed $250 to purchase ladders, buckets and cleaning products. He also needed transport
to travel between customers houses. Bob decided to lease a van at a cost of $150 per month. Bob
has to pay wages to his 2 part-time employees of $300 per month each.

Bob only has a few regular customers and he needs to promote the business to attract more
customers. He is considering printing leaflets, advertising in local newspapers or just relying on
social media. He has to decide which method of promotion to use. He hopes his regular customers
will tell their friends about BW’s excellent services. If the promotion is successful he will need to
ensure his employees can meet this higher demand.

Appendix 1

Text message from one BW employee to another BW employee

10:44
Employee 1 >

I like working with Bob,

he is a good boss. I am
happy he asks us what
we think. I do not want
to work for anyone else
but I would like to work
more hours.

Employee 2:
My last employer
always told me what to
do. I do not like having
to make decisions.
Working fewer hours
and being flexible with
the times I work makes
it easier to look after
my family.
m
co
e.
at
-m
am

© UCLES 2020 03_0450_22_2020_1.11

x
.e
w
w
w
 3

Appendix 2

Summary of costs, price and demand for BW

Fixed cost per month $1250

Variable cost per house cleaned $1

Price per house $11

Average number of customers per month 225

Appendix 3

Article in the national newspaper

Main News 10 February 2020

Should window washing become more environmentally friendly?

The most effective products used to wash windows contain chemicals which damage the
environment. However, these products reduce the time taken to wash windows by 50%.

Many window washing businesses use plastic bottles as containers for all their cleaning products.
Most of these bottles cannot be refilled or recycled.

Washing windows can use a lot of water which reduces the amount of water available for other
uses. Recently a new machine has been developed for washing windows which is very efficient
and recycles the water it uses. Each machine costs $1000.

The Government is being encouraged by environmental pressure groups to introduce legal controls
over the window washing industry.

m
co
e.
at
-m
am

© UCLES 2020 03_0450_22_2020_1.11

x
.e
w
w
w
 4

BLANK PAGE

Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every reasonable
effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the publisher will
be pleased to make amends at the earliest possible opportunity.

To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge Assessment
m

International Education Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download at
co

www.cambridgeinternational.org after the live examination series.

e.
at

Cambridge Assessment International Education is part of the Cambridge Assessment Group. Cambridge Assessment is the brand name of the University of
-m

Cambridge Local Examinations Syndicate (UCLES), which itself is a department of the University of Cambridge.
am

© UCLES 2020 03_0450_22_2020_1.11

x
.e
w
w
w
 ™
Cambridge IGCSE

BUSINESS STUDIES 0450/22

*8605031596*

Paper 2 Case Study February/March 2020

1 hour 30 minutes

You must answer on the question paper.

You will need: Insert (enclosed)

INSTRUCTIONS
• Answer all questions.
• Use a black or dark blue pen. You may use an HB pencil for any diagrams or graphs.
• Write your name, centre number and candidate number in the boxes at the top of the page.
• Write your answer to each question in the space provided.
• Do not use an erasable pen or correction fluid.
• Do not write on any bar codes.
• You may use a calculator.

INFORMATION
• The total mark for this paper is 80.
• The number of marks for each question or part question is shown in brackets [ ].
• The insert contains the case study.

This document has 12 pages. Blank pages are indicated.

co
e.
at
-m
am

03_0450_22_2020_1.11
[Turn over
x

© UCLES 2020
.e
w
w
w
 2

1 (a) Explain four reasons why a person may set up their own business.

Reason 1: .........................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

Reason 2: .........................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

Reason 3: .........................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

Reason 4: .........................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

........................................................................................................................................... [8]

m
co
e.
at
-m
am

© UCLES 2020 03_0450_22_2020_1.11

x
.e
w
w
w
 3

(b) Explain the benefits to BW of employing part-time employees and full-time employees. Do you
think Bob should continue to employ only part-time employees? Justify your answer.

Part-time employees: ........................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

Full-time employees: ........................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

Conclusion: .......................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

........................................................................................................................................... [12]
m
co
e.
at
-m
am

© UCLES 2020 03_0450_22_2020_1.11 [Turn over

x
.e
w
w
w
 4

2 (a) Explain two reasons why Bob used sampling when carrying out a questionnaire.

Reason 1: .........................................................................................................................

...........................................................................................................................................

Explanation: ......................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

Reason 2: .........................................................................................................................

...........................................................................................................................................

Explanation: ......................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

........................................................................................................................................... [8]

m
co
e.
at
-m
am

© UCLES 2020 03_0450_22_2020_1.11

x
.e
w
w
w
 5

(b) Explain the following three methods of promotion BW could use. Which method should Bob
use? Justify your answer.

• Leaflets
• Advertise in local newspaper
• Social media

Leaflets: ............................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

Advertise in local newspaper: ...........................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

Social media:.....................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

Recommendation: ............................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................
m

...........................................................................................................................................
co
e.
at

........................................................................................................................................... [12]
-m
am

© UCLES 2020 03_0450_22_2020_1.11 [Turn over

x
.e
w
w
w
 6

3 (a) Explain two reasons why working capital is important to BW.

Reason 1: .........................................................................................................................

...........................................................................................................................................

Explanation: ......................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

Reason 2: .........................................................................................................................

...........................................................................................................................................

Explanation: ......................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

........................................................................................................................................... [8]

m
co
e.
at
-m
am

© UCLES 2020 03_0450_22_2020_1.11

x
.e
w
w
w
 7

(b) Consider the three main styles of leadership Bob could use in his business. Which leadership
style do you think he should use? Justify your answer.

Leadership style 1: ...........................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

Leadership style 2: ...........................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

Leadership style 3: ...........................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

Recommendation: ............................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

........................................................................................................................................... [12]
m
co
e.
at
-m
am

© UCLES 2020 03_0450_22_2020_1.11 [Turn over

x
.e
w
w
w
 8

4 (a) (i) Calculate the break-even level of output for BW using the information in Appendix 2.

................................................................................................................................

................................................................................................................................

................................................................................................................................

................................................................................................................................ [2]

(ii) Calculate the margin of safety for BW using the information in Appendix 2.

................................................................................................................................

................................................................................................................................

................................................................................................................................

................................................................................................................................ [2]

(iii) Identify four ways break-even analysis can be useful to a business.

Way 1: ...................................................................................................................

................................................................................................................................

Way 2:....................................................................................................................

................................................................................................................................

Way 3:....................................................................................................................

................................................................................................................................

Way 4:....................................................................................................................

................................................................................................................................ [4]
m
co
e.
at
-m
am

© UCLES 2020 03_0450_22_2020_1.11

x
.e
w
w
w
 9

(b) Consider the following three options for BW. Which option should Bob choose to improve
BW’s reputation? Justify your answer.

Option 1: Use cleaning products that contain chemicals

Option 2: Use bottles that can be refilled with cleaning products
Option 3: Purchase a new window washing machine

Option 1: ...........................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

Option 2: ...........................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

Option 3: ...........................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

Recommendation: ............................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................
m
co

........................................................................................................................................... [12]
e.
at
-m
am

© UCLES 2020 03_0450_22_2020_1.11

x
.e
w
w
w
 10

BLANK PAGE

m
co
e.
at
-m
am

© UCLES 2020 03_0450_22_2020_1.11

x
.e
w
w
w
 11

BLANK PAGE

m
co
e.
at
-m
am

© UCLES 2020 03_0450_22_2020_1.11

x
.e
w
w
w
 12

BLANK PAGE

Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every reasonable
effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the publisher will
be pleased to make amends at the earliest possible opportunity.

To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge Assessment
m

International Education Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download at
co

www.cambridgeinternational.org after the live examination series.

e.
at

Cambridge Assessment International Education is part of the Cambridge Assessment Group. Cambridge Assessment is the brand name of the University of
-m

Cambridge Local Examinations Syndicate (UCLES), which itself is a department of the University of Cambridge.
am

© UCLES 2020 03_0450_22_2020_1.11

x
.e
w
w
w