A1 Business Reinforcement Worksheet

Revision of Section One

Instructions:

1.Use the skills developed in O Level English Comprehension Passage Exam and Answer the Questions in
the context of the Case Study.

2. The requirement of the Qs in terms of K, App, An & Ev is the same as discussed in Paper 1 questions
practiced in Class.

Wesley’s Laundrey

Six months ago, Wesley was congratulated on his detailed business plan for a new laundry by the bank
manager. She agreed to lend him $30 000, half of the capital he needed for starting the business. Wesley
planned to offer a premium laundry service for local hotels and guesthouses. His promise was ‘RETURNED
NEXT DAY, or NOTHING TO PAY’.
There were few customers at first, as forecast in the business plan. But news of Wesley’s service standards
and next day promise soon spread. By the end of month three, the laundry was working to full capacity. His
business plan had not allowed for this level of demand. Wesley needed more factors of production. He
recruited three workers to help him.
It is now the end of month four. The bank manager has asked to see Wesley. He is shocked by what he is told:
‘You have reached your overdraft limit. Cash coming into the business is not enough to ensure survival. I want
to see all of your accounting and sales records next week,’ she tells him.
Wesley knows this will be a problem. He has been so busy that his accounting records are three weeks out of
date. Customers have not paid during this period. No bills have been sent out. Some customers are claiming
that they should not pay. Their laundry has taken three days to be returned. The workforce is another
problem. The workers often argue because there are some jobs no one wants to do, such as handling
chemicals and cleaning the boiling tanks at the end of each day. Wesley has not clearly allocated jobs and the
workers cannot decide themselves.
Wesley sat down with all the company’s paperwork and wondered why he had not gained some experience in
computer-based accounting. His own business skills were mainly in marketing.
No wonder the sales of the laundry were doing so well.

1. a) i) Identify one factor of production. [1]

ii) Explain the term ‘customers. [3]
b) Explain two problems that Wesley now faces in managing his business. [3+3]
c) Analyze two reasons why Wesley would benefit from understanding the concept of opportunity cost.[8]
d) Evaluate the benefits and limitations to Wesley of the detailed business plan. [12]