2017 Higher School Certificate Preliminary Examination Business Studies General Instructions ‘© Reading time~ 5 minutes * Working time - 2 hours ‘© Board approved calculators may be used ‘© Write using black or blue pen ‘© Write your student number and/or name at the top of every page Total marks — 80 Section I - Pages 2-8 20 marks ‘ Attempt Questions 1-20 * Allow about 25 minutes for this section Section II — Pages 9-13 40 marks | Attempt Questions 21-24 ‘¢ Allow about 1 hour for this section Section III — Page 14 20 marks © Attempt Question 25 « Allow about 35 minutes for this section This paper MUST NOT be removed from the examination room STUDENT NUMBER/NAME:STUDENT NUMBERINAME .... (A) Primary (B) Secondary (C) Quatemary Childcare facilities and house cleaning are best classified as which type of industry? ©) Quinary ‘Which of the following is an entitlement for a casual employee? (A) Regular working hours (B) Sick leave and matemity leave (©) Holiday leave and long service leave (D) Fair pay and safe working conditions ‘Which of the following is an example of an internal source of finance for a business? (A) Overdraft (B) Mortgage (© Sale of asset @) Leasing Which level of government regulates building regulations, trading hours and land zoning? (A) Local (B) State (©) Federal (D) Intemational ‘Which type of income is paid to the shareholders of a business? (A)_ Dividends (B) Interest (©) Profits (D) Wages Page 3STUDENT NUMBER/NAME: Which business legal structure is listed on Australia’s Securities Exchange? (A) Private company (B) Public company (©) Unincorporated company (©) Government owned business Steve won a large amount of money playing Lotto. The local newspaper printed an unpaid story about Steve and the shop where he purchased the winning ticket, This is an example of which type of marketing for the shop? (A) Advertising (B) Publicity (©) Sales promotion (D) Word of mouth A small business owner has no staff and is legally responsible for all debts. Which of the following best describes this business structure? (A) Partnership (B) Private company (©) Public company (D) Sole trader ‘Which tax is levied by the NSW state government? (A) Payroll tax (B) Company tax (© Pay-as-you-go tax (D) Fringe benefits tax Page 410 te 2 13 STUDENT NUMBER/NAME: ‘Which management approach utilises an autocratic leadership style and hierarchical organisational structure? (A) Behavioural management approach (B) Classical management approach (C) Contingency management approach (D) Political management approach Which of the following is an intangible asset attached to the reputation of a particular business? (A) Goodwill (B) Inventory (©) Cost of goods sold (D) _Non-current assets ‘Tech Tiles Pty Ltd failed to meet financial obligations to stakeholders. The court appointed ‘an independent party to manage Tech Tiles’ financial situation, without selling off assets. What is this process? (A) Liquidation (B) Bankruptoy (© Reveivership () Involuntary cessation A clothing manufacturer decides to segment its market to target 25-40 year old females. ‘Which element of market segmentation is this strategy based on? (A) Behavioural (B) Demographic (©) Geographic () Psychographic Page 514 15 STUDENT NUMBER/NAME: Which pricing method uses the processes of supply and demand? (A) Cost-plus margin (B) Competition based pricing (©) Market price (©) Price skimming If a business breaks even, which of the following statements applies? (A) Total costs equal total revenue (B) Total assets equal total liabilities (©) Variable costs equal fixed costs (D) Total sales equal total revenue 16 Which of the following enables a business to analyse its assets, liabilities and the owner's financial claim on the business? (A) Cash flow statement (B) Revenue statement (©) Balance Sheet (D) _ Breakeven analysis Page 6STUDENT NUMBER/NAME: Use the following information to answer Questions 17 and 18. 17 18 19 Lily Candles Income Statement ~ 2017 Sales $100 000 Opening stock $30 000 Insurance $2,000 Advertising $1 500 Closing stock $15 000 Purchases $5000 Telephone, $1,000 Whaat is Lily's cost of goods sold? (A) $10 500 (8) $20000 (©) $45 500 (@D) $85 000 What is Lily’s gross profit? (A) 10500 (B) $45500 (© $8000 (D) $154500 Australian Government intervention in the business environment has been decreased, to encourage competition. Which of the following would result from increased competition in the business environment in Australia? (A) Lower prices and decreased consumer choice (B) Higher prices and decreased consumer choice (©) Higher prices and increased consumer choice (D) Lower prices and increased consumer choice Page 720 STUDENT NUMBER/NAME: Sharp Sounds Pty Ltd refuses to honour its warrantees on faulty products. ‘Which organisation would assist consumers in getting their money back? (A) Industry associations (B) Australian Securities Exchange (©) Austratian Securities and Investment Commission (D) Australian Competition and Consumer Commission Page 8STUDENT NUMBER/NAME: .. Section IL 40 marks Attempt Questions 21-24 Allow about 1 hour for this section Answer the questions in the spaces provided. These spaces provide guidance for the expected length of response. ‘Question 21 (10 marks) Marks Business Life Cycle Sales Sales Time (@) Identify TWO features of the maturity stage of the business life cycle. 2 @ Gi) Question 21 continues on the next page Page 9Question 21 (continued) Marks () Describe TWO strategies that may be used in response to challenges faced by a business in the maturity stage. 4 @ Gi) (©) Examine TWO factors that contribute to business decline. 4 @ Gi) End of Question 21 Page 10STUDENT NUMBER/NAME: Question 22 (10 marks) Marks Businesses prioritise increased staff involvement in order to improve motivation and morale. (@) Identify TWO benefits of staff involvement within a business. 2 @ (©) Describe TWO non-monetary strategies used by a business to motivate staff. 4 @ w@ (©) Discuss TWO types of involuntary separation that may occur in a business. 4 @ Gi) End of Question 22 Page 11STUDENT NUMBER/NAME: Question 23 (10 marks) Marks Franchising is a business model that allows one business to operate under the established brand of another, to sell its products and/or services for a specified time period. } Franchising can be an alternative to setting up a new business. However, it is important to carefully consider all your options before buying a franchise and to seek advice. (@) Identify TWO economic contributions of small to medium enterprises to the Australian economy. 2 @ w (&) Outline TWO sources of information an individual can access for advice about establishing a small business. 4 @ @ (©) Explain ONE advantage and ONE disadvantage of buying a franchise. 4 Advantage: Disadvantage: .. Page 12STUDENT NUMBER/NAME: Operations managers use a variety of approaches to maintain or improve quality. | (@) What is quality management? 2 () Describe TWO benefits of quality management practices. 4 Question 24 (10 marks) Marks | @ | | | @ (© Examine TWO quality management approaches that may be used by operations managers. ante @ | | | | | | a)... : Page 13STUDENT NUMBER/NAME: Section I 20 marks ‘Attempt Question 25 ‘Allow about 35 minutes for this section Answer the question on your own paper or in a writing booklet, if provided. ‘The expected length of the response is approximately 800 words or six written pages. In your answer you will be assessed on how well you: © use your knowledge and the information provided + communicate using relevant business terminology ‘present a logical, well structured answer to the question in the form of a business report Question 25 (20 marks) Mia Grace owns Grace Realty, areal estate business operating since 2001. She employs 5 full-time staff and 7 casual staff. Grace Realty opens 6 days per week. Despite real | estate value increasing, the business has experienced a decline in market share, due to new competitors. Mia is considering an offer to merge with another real estate, to increase market share. However, the other real estate operates different systems, opens | 7 days per week and has a different workplace culture. Assume that you have been hired by Grace Realty as a business consultant, ‘Write a report that addresses EACH of the following: Explain TWO external influences on this business. «Discuss why employees may resist change. «Recommend strategies to manage change effectively. End of paper Page 14