www.dynamicpapers.com Please check the examination details below before entering your candidate information Centre Number Candidate Number LTDOTD Pearson Edexcel International GCSE Time 1 hour 30 minutes Business PAPER 1: Investigating small businesses ‘You do not need any other materials. “Total Marks Instructions © Use black ink or ball-point pen. © Fill in the boxes at the top of this page with your name, centre number and candidate number. © Answer alll questions. © Answer the questions in the spaces provided ~ there may be more space than you need. © Calculators may be used. Information © The total mark for this paper is 80 ‘© The marks for each question are shown in brackets — use this a5 a guide as to how much time to spend on each question. Advice © Read each question carefully before you start to answer it. © Try to answer every question. © Check your answers if you have time at the end. 5/4/2023 Turn over ema Pe sew O tO Pearsonwww.dynamicpapers.com FORMULAE FOR INTERNATIONAL GCSE BUSINESS Gross profit margin: Gross profit = revenue - cost of sales Gross profit margin = FOSS Profit 5 4 revenue Operating profit margin: Operating profit = gross profit - other operating expenses Operating profit margin = 9Perating profit, 44 revenue Markup: Markup = Profit peritem, cost per item 100 Return on capital employed (ROCE): ROCE = operating profit, capital employed 100 Current ratio: Current ratio = _Surrent assets current liabilities Acid test ratio: Acid test ratio = Surrent assets — inventory current liabilities 2 IAN WN orem WaUV SIHL NIALLIM LON 00 VaUY SIHLNIALIUM 10N 04 WAY SIHLNISLIUM.LON OGDO NOT WRITE IN THIS AREA DO NOT WRITE IN THIS AREA DO NOT WRITE IN THIS AREA Answer ALL questions. Write your answers in the spaces provided. www.dynamicpapers.com ‘Some questions must be answered with a cross in a box/ If you change your mind about an answer, put a line through the box 8 and then mark your new answer with a cross BZ. 1 Can Culleretesis a restaurant based in the Spanish city of Barcelona. Opening in 1786 itis the second oldest restaurant in Spain. I has been run by the Agut-Manubens family since 1958 and serves a variety of Mediterranean food. Sisters Montserrat and Alicia are co-owners of the restaurant with six members of the family working for them. The restaurant is near to popular tourist attractions and close to many other restaurants. It opens for lunch and dinner only. (2) (i) Which one of the following could immediately improve cash flow? Select one answer. ®@ooada (i) Which one of the following is an example of primary market research? A B c D Allow customers to pay later Launch an advertising campaign Increase inventory of raw materials Pay suppliers later Select one answer. Oo oog8 A B c D Internet Postal survey Newspaper Government report (it) Which ene of the following is a fixed cost? Select one answer. B o o o = on wp Rent Packaging J Weekly wages Raw materials Pero 7 3 6 A0 3.2.0 3 3 Turn overwww.dynamicpapers.com (iv) Which one of the following is used to calculate the break-even point? Select one answer. @ooa A B c D Fixed costs x (selling price + variable costs) Fixed costs x (selling price — variable costs) Fixed costs = (selling price + variable costs) JS Fixed costs = (selling price - variable costs) For its Winter menu Can Culleretes buys 10 kilograms (kg) of salmon from Scotland every week at a cost of £19.17 per kilogram. In November 2021 the exchange rate was £1 = €1.17 (v) Which one of the following is the total cost in euros of buying a two week supply of salmon? WATHO x9 VII7 Select one answer. Boadad one > 191.70 224.29 €383.40 £448.58 4.6 Can Culleretes buys its prawns from a local fishmonger at a cost of €11.50 a kilogram. itis then sold to customers for €13.70 a kilogram, (vi) What is the markup on a kilogram of prawns? Select one answer. oMaa 3.7 - NS be 115% NS 13.7% 19.196 23.0% Pero 7 3 6A 0 4 2.0 3 : WaUV SIHL NIALLIM LON 00 VaUY SIHLNIALIUM 10N 04 WAY SIHLNISLIUM.LON OGDO NOT WRITE IN THIS AREA DO NOT WRITE IN THIS AREA DO NOT WRITE IN THIS AREA www.dynamicpapers.com (b) Define the term job production One unique project is made buy a company at a time. J When an item is made and finished before the next one is started (c) Define the term diseconomies of scale. / ‘When average costs increases when number of units increases (d) State one method Can Culleretes could use to collect quantitative market research. analyse statement of financial position of different businesses. Figure 1 is an extract from Can Culleretes’ cash-flow forecast. June Opening balance €4.400 Cash inflow €4600 Cash outflow 3.000 Net cash flow Figure 1 (e) Calculate the net cash flow for Can Culleretes in June. You are advised to show your working. a a) a) @) Net cash flow= cash in - cash out net cash flow = 4600-3000 net cash flow = 1600 € 1600 = {NN 6 5 Turn over >www.dynamicpapers.com (f) Explain one benefit to a business of improving communication with its ‘employees. @) If communigftion with employees alse there will be less miscogetunication when delivering ‘instructiong/on-how:to-complete-tasks, this will result in-a lower-likgtZhood of employees making: mistakes\4s a result, waste could decrease in the hones thereby reduce average ccosts,,and result in.larger profit margins for. the business, {NN cram WaUV SIHL NIALLIM LON 00 VaUY SIHLNIALIUM 10N 04 WAY SIHLNISLIUMLON OGDO NOT WRITE IN THIS AREA DO NOT WRITE IN THIS AREA DO NOT WRITE IN THIS AREA www.dynamicpapers.com Can Culleretes is looking to launch an app that allows customers to order their meals allows customer in the restaurant using their mobile phones. (g) Analyse the likely impact on productivity if Can Culleretes launches this app. (6) The app is likely to increase productivity, due to the fact that, as a result of customers ordering through their phones directly, there is no chance of error by human waiters taking orders, this can reduce the amount of confusion, and as a result lead to less mistakes made while serving food, this leads to less food being sent back and being wasted, andfower average costs per unit for the business; atlowing it to potentially become’ more’ producti However, customers without mobile phones, or without the knowledge on how to operate the app will not be able.to.order food, as they.can nat access. the app,.as a result of this. Can Culleretes may end up losing customers to their restaurant, and this wil lead to less food sold, and as a result revenue may not be maximized and productivity iia’ be limited. (Total for Question 1 = 20 marks) a 7 = Turn over >www.dynamicpapers.com 2 During the preparation of food, the chefs at Can Culleretes have to follow health and safety regulations. New regulations are made from time to time. (a) State one impact government legislation could have on Can Culleretes. a Increased costs as following new regulations may lead to increased investment in sanitation, and even retraining of some staff at the restaurant. eg: dishwashers, chefs. (b) State one way Can Culleretes might add value to its business. a It could add value to its business by becoming a public limited company and issuing shares at a pric (©) Explain one method a business could use to encourage repeat purchase of its products. (@) A business could hand out discount coupons and voucher codes that provide discounts or special offers to its customers, rational customers will want to purchase goods at a lower price, so may return aya to buy Tron the business, and therefore the business wil have generated repeat custom NOTE -. NEED A BULLETPROOF. : 6 WaUV SIHL NIALLIM LON 00 VaUY SIHLNIALIUM 10N 04 WAY SIHLNISLIUMLON OGDO NOT WRITE IN THIS AREA DO NOT WRITE IN THIS AREA DO NOT WRITE IN THIS AREA www.dynamicpapers.com (d) Explain one disadvantage of using personal savings as a source of finance for a business. @) ‘One disadvantage is that once the money is spent, it can no longer be used in future in times where it mTiay Be more Usefil NOTE - NEED A BULLETPROOF (@) Explain one benefit for a business of motivating its employees. @) More motivated employees will reduce average costs, this is because they will be more productive which will lead them ; = {NN » P7To?vy36A0 392 0 Turn overwww.dynamicpapers.com Can Culleretes is looking to improve its revenue and is considering two options: Option 1: increase advertising Option 2: opening for breakfast. (f)_ Justify which one of these two options Can Culleretes should choose. (9) Can Culleretes should choose option 1 and increase advertising, this is because they will be able to reach’a larger audience: and gain the attention ‘of more’ potential customers to try their healthy: and high quality food, this will lead to more plates of mediteranean food sold per day for Can Culleretes which will directly lead to-inoreased profits If Can CUlleretes were to choose option 1, they would have to hire and employ a large number of staff, this is because by operating for more hours they would need more waiters and chefs to cater for ‘cistomers during the breakfast period. This would lead to higher costs as more employees need to paid wages, a8 'a'result the costs incurred by Carr Culleretes may increase, and make increases'i revenue’ insignificant as profit margins would not be guaranteed to increase accordingly Furthermore by choosing option 1, Can Culleretes would be able to increase the value of their food, if they were to market their healthy, and premium quality mediteranean food, This would allow them to iiieréae tiie price of thé Téod Gn their niehiu eectivaly, as their customers WOuld bs rade aware oF their unique selling point, healthiness, and be considered more premium then other restaurants in the area; and worth paying more for: This would directly lead to greater revenue'per dish’ sold; and increase total revenue. 10 : Pero? 3 6 A010 WaUV SIHL NIALLIM LON 00 ‘au SIHLNI ALM LON 0a WAY SIHLNISLIUMLON OGDO NOT WRITE IN THIS AREA DO NOT WRITE IN THIS AREA DO NOT WRITE IN THIS AREA www.dynamicpapers.com (Total for Question 2 = 20 marks) = {AVA NAA A a » P7To?73 6A01 7 Turn overwww.dynamicpapers.com 3 (a) Define the term non-current assets. a Assets owned for more then 12 montsh (b) Outline one disadvantage to Can Culleretes of increasing the amount of inventory it holds Q) Itis a restaurant, so food ingredients would perish, this would lead to wastage and increased average costs which would result in lowe r profit margins for the restaurant Figure 2 is an extract of financial information from Can Culleretes. Sales revenue €19.220 Cost of sales €14720 Gross profit €4500 Figure 2 (6) Calculate, to 2 decimal places, the gross profit margin. You are advised to show your working. (2) Gross profit margin = Gross profit/ Revenue x 100 Gross Profit margin = 4500/ 19220 x100 Gross profit margin = 23.41% 2 : WaUV SIHL NIALLIM LON 00 VaUY SIHLNIALIUM 10N 04 WAY SIHLNISLIUMLON OGDO NOT WRITE IN THIS AREA DO NOT WRITE IN THIS AREA DO NOT WRITE IN THIS AREA www.dynamicpapers.com (d) Analyse the impact of customers using social media to review Can Culleretes. 6) Using social media for review Can Culleretes could allow customers to speak very negatively online about the restaurant. This could lead to less customers coming to try their food if reviews of other restaurants seemed better. As a result Can Culleretes could sell less dishes per day and would imaké Tess reverie However, Good reviews Could have the opposite impact Furthermore, by using social media, more customers would feel free to speak out and provide feedback to the mediteranean restaurant.on.certain dishes, this. could. provide Can.Culleretes.to.free. market research on which dishes are doing well and which’ are doing worse, allowing them to change certain dishes and menu items, inorder to please the most amount of customers, as a result ofthis, they'could introduce repeat custom, as customers will feel more connected with the restaurant, if changes they suggested are implemented. 3 Turn over >www.dynamicpapers.com Can Culleretes is planning to introduce a new range of desserts. To do this it would have to recruit anew dessert chef, Can Culleretes is considering two options Option 1: offer the new chef a permanent contract Option 2: offer the new chef a temporary contract. (e) Justify which one of these two options Can Culleretes should choose. (9) [Can Culierates should consider giving the new chef a temporary conrtact, as this will indicate to the hef that his position within the restaurant may not continue, this may lead to the chef being more lédicatéd arid productive, to prove their worth and secure the riext contract, This will lead to the chef roducing greater quality dishes, in greater quantity per unit of time. As a result the Can Culleretes will perableto-ntsty thor cstomers wit short serie tes anc good quaity deoerts- This may teed them fo spend more, and bring in greater revenue for Can Culleretes. VaUY SIHLNIALIUM 10N 04 fjuthermere, by choosing option 1, and using a permenant contract, Gan Gulleretes would be forced to keqp the jesert chef in employment in the case that the new range of deserts not taking off with customers, this wobldad to igher average costs for Can Culleretes, which woudl lead to lower profit margins 2 g However, by choosing option: 2;Can-Culleretes would-also:be-able-to-have the option of replacing:the:chel & n tho case that his dessert making skills prove to be inadequate, this will reduce the risk in the decision, aq Can Falleretes may.choose fo provide a permenant contact tothe che hey prove the il in making madierean jeserts 5 = 5 z 9 8 é s = 2 nm z2 5 = a = m 5 “ :DO NOT WRITE IN THIS AREA DO NOT WRITE IN THIS AREA DO NOT WRITE IN THIS AREA www.dynamicpapers.com (Total for Question 3 = 20 marks) = {AVA AA A ‘ » P7To?73 6A01 5 Turn overwww.dynamicpapers.com 4 Can Culleretes offers a fixed price dinner menu at €38.40 per person. Groups of five or mote are given a discount of 12.5% on their total bill, (a) Calculate the total cost of a group of 12 people ordering from the fixed price dinner menu. You are advised to show your working. 2 rc (12*38.40)*(1-0.125)= 403,20 403.20 {AVA AA A orem WaUV SIHL NIALLIM LON 00 VaUY SIHLNIALIUM 10N 04 WAY SIHLNISLIUMLON OGDO NOT WRITE IN THIS AREA DO NOT WRITE IN THIS AREA DO NOT WRITE IN THIS AREA www.dynamicpapers.com ‘The city of Barcelona has seen a number of new restaurants offering various menus such as Italian and Turkish. (b) Analyse the importance of Can Culleretes responding to changes in its market. 6) NOTE- BULLET PROOF ANSWER FOR THIS 7 cae] {MOANA A A » P7To?3s6A01 7 Turn overwww.dynamicpapers.com Can Culleretes is opening Can Café near its restaurant. Can Café will be a smaller premise providing a variety of drinks and smaller plates of food for people in a hurry. (0) Evaluate the impact of using venture capital as a source of finance to fund the opening of Can Café. You should use the information provided as well as your ‘own knowledge of business. (12) Pro? 3s 6A 01 8 : WaUV SIHL NIALLIM LON 00 VaUY SIHLNIALIUM 10N 04 WAY SIHLNISLIUMLON OGDO NOT WRITE IN THIS AREA DO NOT WRITE IN THIS AREA DO NOT WRITE IN THIS AREA www.dynamicpapers.com (Total for Question 4 = 20 marks) TOTAL FOR PAPER = 80 MARKS = Pro? 3 6A 01 9 1»www.dynamicpapers.com BLANK PAGE 20 Pero? 3 6 A020 : WaUV SIHL NIALLIM LON 00 VaUY SIHLNIALIUM 10N 04 WAY SIHLNISLIUMLON OG