UNIVERSITY EXAMINATIONS. UNIVERSITEITSEKSAMENS mm my UNISA lace: BSM1501 (494498) May/dune 2017 SECOND PAPER BUSINESS MANAGEMENT IA Duration 2 Hours 70 tarks EXAMINERS. FIRST MSA VAN LILLE SECOND MS E KRUGER Closed book examination ‘This examination question paper remains the property of the University of South Africa and may not be removed from the examination venue (TURN OVER}UNIVERSITEITSEKSAMENS. UNIVERSITY EXAMINATIONS — oe, UNISA less BSM1501 (494498) May/June 2017 SECOND PAPER BUSINESS MANAGEMENT IA Duraton 2 Hours 70 Marks EXAMINERS FIRST MS A VAN LILLE SECOND MS E KRUGER Closed book examination This examination question paper remains the property of the University of South Africa and may not be removed from the examination venue INSTRUCTIONS FOR COMPLETING THIS EXAMINATION PAPER: This examination paper consists of 20 pages plus instructions for completing a mark- reading sheet Please complete the attendance register on the back page, tear it off and hand it to the invigilator Answer all the questions on a mark-reading sheet and circle the correct answers on the examination question paper as well (TURN OVER)BSM1501 ‘May/June 2017 READ THE CASE STUDY BELOW AND ANSWER ALL THE QUESTIONS THAT FOLLOW CASE STUDY: DIARY OF JANE JEWELLERY DESIGNS Jane McKenzie studied for a BA in Fine Arts (Jewellery Design and Metal Techniques) at Stellenbosch University She also completed a course in design at a university in Germany After completing her studies, she was inspired to start her own business and she started Diary of Jane Jewellery Designs in 2010 She registered it as a sole proprietorship Diary of Jane Jewellery Designs sells precious pieces of jewellery, created with such simplicity im the design that it can be worn every day These pieces of jewellery are made with gold, silver, brass and copper and, occasionally, with gemstones These designs celebrate the beauty of simplicity and translate into functional jewellery Jane decided to work from her home in Cape Town, instead of spending thousands of rand on rent for 2 studio Jane used R120 000 of her savings to equip her garage with all the necessary jewellery tools and equipment and she also purchased furniture for the room She identified the needs of affluent clients, who preferred one-of-a-kind designer pieces for special occasions, and she relied on referrals only Jane's jewellery became so popular that she could not cope with all the orders anymore She appointed Morgan Mochuana and Raymond Ngele, who both specialised in the manufacturing of jewellery and have acquired many skills in this field With the addition of the two new appointments, Jane realised her garage studio was too small and she decided to move to larger premises, which she will have to rent She applied for a foan of R200 000 in order to buy more advanced jewellery equipment and tools, which they could use to apply new techniques, and to acquire extra furniture for the bigger premises To get the loan, Jane offered her home as security The new premises was @ double story building and Jane decided to use the space upstairs as the studio where she, Morgan and Raymond will make the jewellery Morgan suggested that they no longer make designer one-of-a-kind pieces only, but that they also produce higher volumes of less expensive, similar jewellery pieces and use the downstairs space as a shop with display areas for the ready-made jewellery Jane then had to appoint a full-time shop-assistant to handle the sales Raymond suggested that Jane should (TURN OVER]sM1501 May/June 2017 also invest in a website {0 reach a larger market and he also pointed out that it would provide them with access to online sales and orders as well The process of making a one-of-a-kind jewellery piece starts when a potential client phones to arrange an appointment with Jane at the studio Jane will then sketch a design according to the client's preferences Thereafter, she will show the client samples of the metals and gemstones that will suit that particular design As soon as the client has decided on a design and the matching metals and gemstones, Jane will work out @ quotation for the jewellery piece The client must then sign a contract to confirm acceptance of the quotation and pay a deposit of 50% of the final price This will provide Jane with enough cash to buy the metals and gemstones Jane and her team will then start making the piece according to the client's, measurement specifications The remainder of the money has to be paid when the chent collects the jewellery piece from the studio. For the ready-made jewellery pieces, Morgan and Raymond have free reign with regard to design Their jewellery 1s then displayed in their shop downstairs Jane's target market is in Cape Town and, thanks to Raymond's website dea, their market has expanded to the whole of South Afnca Though she competes with other, more well- known, jewellery chain store brands such as American Swiss and NW, her jewellery 1s unique, and consists of one-of-a-kind designer pieces, giving her a competitive advantage (TURN OVER]BSM1501 May/June 2017 MULTIPLE-CHOICE QUESTIONS Chapter 1 1 Jane McKenzie could be classified as 1) a small business manager 2) an intrapreneur 3) an entrepreneur 4) a franchise manager 2 Morgan Mochuana, who made the suggestion that they open a shop and sell less expensive jewellery, could be classified as 1) an intrapreneur 2) an entrepreneur 3) asmall business manager 4) a franchise manager 3. Under which one of the following types of enterprises can Diary of Jane Jewellery Designs be classified? 1) Micro 2) Very small 3) Small 4) Large 4 In which one of the following business sectors can Diary of Jane Jewellery Designs be classified? 1) Informal 2) Formal 3) Franchise 4) Retail ITURN OVER]Bsm1s01 May/June 2017 5 One of the challenges that Diary of Jane Jewellery Designs will experience is that 1) resources, such as gemstones, will be difficult to obtain 2) financing for machinery will be difficult to obtain 3) financial records must be kept 4) itis not a registered form of enterprise 6 Jane's love and natural talent for designing and making jewellery 1s an example of her 4) skills 2) expertise 3) aptitude 4) commitment Jane completed her BA degree in Fine Arts, therefore, she developed her 4) skills 2) expertise 3) aptitude 4) positive attitude 8 Jane used R120 000 of hor savings to buy machinery and furniture This 1s an example of her 1) positive attitude 2) involvement 3) commitment 4) perseverance Chapter 2 9. Diary of Jane Jewellery Designs’ primary objective is to 1) make beautiful jewellery of good quality 2) satisfy their client's needs 3) make a proft 4) create a good working environment (TURN OVER)BSMi501 May/June 2017 10 The upstans studio, where Jane, Morgan and Raymond design and make the Jewellery, can be regarded as the _ of Diary of Jane Jewellery Designs 1) enterpnse 2) establishment 3) industrial column 4) production branch 11 Diary of Jane Jewellery Designs design and make jewellery and sell them directly to their chents The enterprise could therefore be classified under the production branches 1) manufacturing and commercial 2) manufacturing and service 3) commercial and service 4) jewellery services and jewellery trading 12 After Morgan's suggestion, Jane opened a shop that sells ready-made jewellery durectly to their chents Diary of Jane Jewellery Designs can thus be classified in the sector 4) primary 2) manufacturing 3) secondary 4) tertiary 13 Jane, Morgan and Raymond use jewellery tools and machinery to transform metals and gemstones into wearable jewellery Diary of Jane Jewellery Designs can therefore also be classified nthe sector 1) primary 2) secondary 3) commercial 4) tertiary (TURN OVER}BSM1501 May/June 2017 14 The process followed by one of Jane's jewellery pieces, from the original stage where Jane designs and makes the piece, up until the chent collects it, is known as the 1) industrial column 2) enterprise 3) establishment 4) production branch 18 Morgan and Raymond can be regarded as which one of the four production factors in Diary of Jane Jewellery Designs? 1) Capital 2) Natural resources 3) Labour 4) Entrepreneurs 16 Jane's jewellery tools, equipment and furniture can be regarded as which one of the four production factors? 1) Entrepreneurship 2) Labour 3) Natural resources 4) Capital 17 Jane sketches designs of the requested jewellery piece according to the clent's preferences and shows her examples of metals and gemstones that would work well with that particular design The client then decides on a design and on the preferred metal and gemstone This refers to the client's nght to 1) be informed 2) exercise personal choice 3) be heard 4) be protected [TURN OVER]BSM1501 Mayhlune 2017 18 Suppose one of Jane's clients wants to add a new jewellery piece to her collection The client now has to choose between a ring, bracelet, necklace or earrings To which type of competition does this refer? 1) Competition between the needs of consumers 2) Competition between product forms 3) Competition between the ways that a need can be satisfied 4) Competition between different trademarks 19 Jane's clients’ disposable income will determine how much they would be willing to spend on @ new jewellery piece This 1s an example of how the environment could influence Diary of Jane Jewellery Designs 1) economic 2) social 3) technological 4) physical 20 Jane's website gives busy clients, who do not have enough time to go shopping, the option to order jewellery pieces online, which 's convenient and saves time This is an example of the environment 4) economic 2) technological 3) intemationat 4) social Chapter 3 21 Which approach did Jane use to generate the Diary of Jane Jewellery Design’s business tdea? 1) The common needs of consumers 2) Her skills, expertise and aptitudes. 3) The existing problems of consumers 4) The everyday activities she performs [TURN OVER]BSM1501 May/June 2017 22 During the creation of her enterprise, Jane identified her business concept in the stage 1) idea 2) planning 3) implementing 4) decision-making 23 In order for Jane to come up with unique and creative jewellery designs, she has to apply thinking 1) convergent 2) analytical 3) divergent 4) logical 24 Jane would use a to further develop her business idea 1) business plan 2) viability study 3) feasibility study 4) bow-tie diagram 25 Dunng the creation of her enterprise, Jane identified her potential clients in the stage 4) idea 2) planning 3) implementation 4) action 26 During the creation of her enterprise, Jane registered Diary of Jane Jewellery Designs as a sole proprietorship inthe stage 4) implementation 2) idea 3) planning 4) decision-making [TURN OVER}10 BSM1501 MaylJune 2017 27 Jane's viabihty study would focus on 1) her ability to convert the idea of Diary of Jane Jewellery Designs into a real enterprise 2) the potential of the idea to be converted into a real enterpnse 3) the market and profit potential of Diary of Jane Jewellery Designs 4) meeting the needs of her clients Chapter 4 28 There are four steps to determine the market potential of any enterprise What is the third ‘step in determining the market potential of Diary of Jane Jewellery Designs? 1) Determine the mission and objectives 2) Establish the needs and charactenstics of consumers 3) Do market analysis 4) Do market research 29 It 1s important that Jane conducted the market research before she compiled her business plan Market research entails 1) gathering information on a certain market so that better and more informed decisions can be made 2) a study of consumers’ needs and characteristics 3) the gathering of information on the total potential market so that segmentation can take place 4) calculating the size of the potential market and a customer profile 30 Jane's chents prefer designer jewellery pieces thal are one of a kind This relates to the segment of Jane's total potential market 1) demographic 2) geographic 3) psychographic 4) behaviounstic (TURN OVER]a BsMi1s01 MayHune 2017 31 Before the website was created Jane's jewellery store targeted only her Cape Town chents This relates tothe segment of Jane’s total potential market 1) demographic 2) geographic 3) psychographic 4) behaviounstic 32 Jane targets affluent clients This relates to the segment of Jane's total potential market 14) demographic 2) geographic 3) psychographic 4) behaviounstic 33 Jane's chents request new jewellery pieces for every special occasion This relates to the segment of Jane's total potential market 1) demographic 2) geographic 3) psychographic 4) behaviouristic 34 Jane stays informed about all the new trends and techniques in the jewellery industry Her advanced machinery can be listed as. in her SWOT analysis 1) astrength 2) a weakness 3) an opportunity 4) athreat [TURN OVER]2 esmis01 May/June 2017 36 Morgan and Raymond, who both specialise in the manufacturing of sewellery, can be listed as in Jane's SWOT analysis 1) strengths 2) weaknesses 3) opportunities 4) threats 36 The garage, where Jane started her business, became too small for her and the new employees Jane's garage could then be listed as 1n the SWOT analysis 4) a strength 2) aweakness 3) an opportunity 4) athreat 37 American Swiss and NWJ can be listed as _in Jane's SWOT analysis 1) strengths 2) weaknesses 3) opportunities 4) threats 38 Jane has to compete with other, more well-known, jewellery brands such as American ‘Swiss and NWJ The percentage of the market that she could serve 1s known as her 1) target market 2) market share 3) market segmentation 4) total potential market [TURN OVER]3 8SMi501 MaylJune 2017 39 The rent Jane will pay for the new larger premises is an example of Diary of Jane Jewellery Designs’ cost 1) fixed 2) variable 3) direct 4) indirect 40 When Jane has to calculate the total cost per unit for making one piece of jewellery she would add the direct material cost per unit, the indirect cost per unit and the per unit 1) indirect material cost 2) direct labour cost 3) vanable cost 4) overheads 41 Jane buys the raw matenals for her jewellery according to the number of orders she receives every month The cost of her raw materials is an example of Diary of Jane Jewellery Designs’ cost 1) fred 2) direct 3) variable 4) indirect 42 Jane would calculate the selling price for one piece of jewellery by adding the to the total cost per unit 1) percentage profit 2) overheads 3) expenses 4) duect material cost [TURN OVER}4 BsM1501 May/June 2017 43 The following formula can be used to calculate the Fixed costs Rand= = ———__—_——- x 100 Gross profit margin % 41) turnover 2) expected net profit 3) break-even point 4) projected income 44 The final step to determine the profit potential of Diary of Jane Jewellery Design, 1s to 1) do cash planning 2) calculate the break-even point 3) do projections 4) compile a pro forma income statement 45 Jane's jewellery 1s becoming more popular The fact that there are only three jewellers, could limit the maximum number of orders they could accept within a certain period This 1s known as 1) the capacity of the enterpnse 2). the state of South Africa's economy 3) the actual market share 4) Jane's target market Chapter 5 46 The principles of a business plan states that Diary of Jane Jewellery Design's business plan 1) should be a fixed planning document 2) should be developed by Jane 3) should be developed by professional people 4) does not have to be a comprehensive document (TURN OVER}8 BsM1501 May/June 2017 47 Which one of the following ts NOT 2 guideline Jane should keep in mind when the business plan is written? 1) Keep the pian short 2) Avoid exaggeration 3) Avoid highlighting the cntical asks. 4) Capture the reader's interests 48 The executive summary of Jane's business plan should 4) contain a short summary of the highlights of her business plan 2) be wntten before the business plan is completed 3) be inserted on a separate page before the table of contents 4) not be wntten in paragraph format 49 When Jane applied for a loan, the financial institution required a form of collateral ‘security Which form of security did Jane offer as collateral security? 1) Fixed assets 2) Property 3) Policies 4) Investments 50 Diary of Jane Jewellery Design's balance sheet is a summary of the 1) income and expenditure 2) opening cash balance and closing cash balance 3) sales and expenses 4) assets and abilities 51 Which one of the following main entries can be found in Diary of Jane Jewellery Design's balance sheet? 1) Cash receipts 2) Cash payments 3) Capital employed 4) Cost of sales ITURN OVER}16 BSMi501 May/June 2017 52 When Jane compiles the ownership structure, she would indicate that she owns — of Diary of Jane Jewellery Design 1) 100% 2) 75% 3) 50% 4) 25% 53 Jane would calculate the closing cash balance by 1) deducting the cash receipts from the cash payments 2) adding the opening cash balance to the net cash balance 3) deducting the cash payments from the net cash balance 4) adding cash receipts to the opening cash balance 54 To calculate her net profit in the income statement, Jane would 1) add sales to the gross profit 2) add the expenses to the gross profit 3) deduct cost of sales from the gross profit 4) deduct the expenses from the gross profit 55 Which one of the following main entries can be found in Diary of Jane Jewellery Design's income statement? 1) Cash receipts 2) Long-term liabilities 3) Gross profit 4) Capital employed 56 Under which one of the following headings, in Jane's business plan, would she indicate who and where her suppliors of raw materials are? 1) Executve summary 2) Description of the enterprise 3) Marketing plan 4) Management [TURN OVER]v7 Bst1501 Mayllune 2017 ‘87 Whos the main user of Diary of Jane Jewellery Design's business plan? 1) Jane 2) The bank 3} Jane's supplier of resources 4) Jane's employees 58 Most of Jane's clients are referrals from previous, satisfied clients This can be regarded as in Jane's marketing communication strategy 1) advertising 2) sales promotions 3) personal sales 4) publicity 59 In the conclusion of Diary of Jane Jewellery Design's business plan, the should be indicated 1) amount that Jane invested as own capital 2) ownership structure 3) organisational structure 4) human resource plan implemented by Jane Chapter 6 60 Diary of Jane Jewellery Design 1s registered as a sole proprietorship. therefore, it may consist of 1) 2 to 20 members 2) 2 partners 3) 1 to 10 shareholders 4) Towner (TURN OVER]18 BSM1501 MaylJune 2017 61 Jane has to keep in mind that the name of her business 1) may be any legal name 2) must end with Pty 3) can end with Lid 4) must end with CC 62 A sole proprietorship does not have a legal personality This means that Diary of Jane Jewellery Design 1) can exist independently from Jane 2) can act in its own name 3) cannot exist independently from Jane 4) can own its own assets 63 A sole proprietorship has limited continuity This means that Diary of Jane Jewellery Design 1) does not cease to exist f Jane dies 2) has an indefinite lifespan 3) exists independently from Jane 4) would cease to exist f Jane dies 64 Chents’ orders must be executed as agreed and this requires carefut planning of equipment and labour This forms part of the function 1) general management 2) operations 3) human resources 4) marketing s to her subordinates This 65 Jane has to allocate duties, authority and responsi forms part of the function 1) marketing 2) operations 3) general management 4) purchasing [TURN OVER]9 BSM150% May/June 2017 86 Before Jane could appoint Morgan and Raymond, she had to determine what qualifications they should have This refers tothe phase 41) Job description 2) Job specification 3) recruitment 4) employment 67 Jane has to exercise quality controt on all the jewellery going out to her clients This forms part of the function 1) general management 2) marketing 3) purchasing 4) public relations 68 Jane has to set realistic standards against which the actual performance of her ‘employees can be measured and she has to ensure that her staff members comply with these standards This forms part of the element of the general management function 1) planning 2) organising 3) leading 4) control 69 Jane has to register Diary of Jane Jewellery Design with the Receiver of Revenue As the ‘owner of a sole proprietorship Jane pays tax 1) according to a fixed rate 2) im her personal capacity 3) according to the business’ taxable income 4) on her monthly net income [TURN OVER}8SM1501 MayiJune 2017 70 One of the important establishment factors that Jane had to consider when she opened Diary of Jane Jewellery Design, would be the 4) regional incentive programme 2) climate 3) costs 4) nature of the end product TOTAL 70 e nis 2017ASAMEAE university oF souta arnica LU NV ISA lex EXAWINATION MARK READING SHEET PART 1 (GCNERAL/ALGEMEEN) DEEL 1 6 Satin vaw mean G vanes @ Etgaudesera one ev PeeTOnA e SSR See UNIVERSITET VAN SUID-AFRIKA EKSAMEN-MERKLEESBLAD 600 Ter fs os cos ev o> co eas caf fas ec nets > ca Esciiianmarde favcaaen ane [asc ebsegrezseqiegy em] fos caren ets ea ES: hs gam sc 3a bees Bh I LOee behiss cos MM cs csscn] go ies MRO sos fase ebs eres cos cesebo] fas cay cored Barnard fas green fos cascasebsegs cas coset] [gs cancghcgs ca foi cascor peaaseasetevey] [oscar cpecns om For use by examination invigilator Vir gebruik dour eksamenopsiener 4 1 Geant suds m we 7012009 OM WeROE LAO FE VOLE! 2 Mitmas voce) om 53 wOnTROLEER DAU WOORLETTERS cw aN REG EAVES PART 2 (ANSWERS/ANTWOORDE) DEEL 2 Tas Sopa a ay Wah ae wana es 2 deean coca] Domains Bo iiaare @ cadens 3 thane cay Bonga: B wienaias @ osasasen ol 1 ihibercn sal B Wigan Maids gia) dedi enes Saar © Giana B Weve as MO Gael § creer cal 4 agemance mem manss Maret asearcs] 1 tieheaen si B harencs D asain fe eb arene 1 ihdeares ead iain ssc} Seabees Mh iii aieses Soavaicnte le arma inane ne ap aeae: b Gianna saa a) SEG ib daa Menace cs 6 amar cae enege css eyes as eares 2 iidiandn a 6 daa Bo tiaab AUB SS Bo cuass cn @ cap aiaseal B oWidare Bab Parris Sa Oe Boh ae ma Bo Gunacanay aaah 5 en? 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