Paper 2 mock

Question 1

How to calculate gross profit and gross profit margin?

Answer 1

Gross profit= sales revenue - cost of sales
Gross profit margin(%)= gross profit/sales revenue x100

Question 2

How to calculate labour productivity and what is it?

Answer 2

Is a measure of how much output is produced per unit of labour input.
Labour productivity= output per period/number of employees

Question 3

What is market share and how to calculate it?

Answer 3

The share of total market that is owner by a particular business, product or brand.
Market share(%)= sales / total market size x100

Question 4

What is payables day and how to calculate it?

Answer 4

Number of days the firm takes to pay for goods it buys on credit from suppliers
Payable days= payables / cost of sales x365

Question 5

How can business increase revenue and keeps costs to a minimum?

Answer 5

These are reducing costs, increasing turnover, increasing productivity, and increasing efficiency

Question 6

What is a trade union?

Answer 6

Organised association of workers in particular in industry, act on behalf of group of employees in the workforce when negotiating rates of pay and working conditions, strengthens individuals bargaining power, TU give advice and assistance to individual employees having problems with their employer.

Question 7

How to improve cashflow ?

Answer 7

• overdrafts (allows business to borrow money according to its needs, can very be expensive in long term, and pay interest)
• try hold less stock, so less cash is tied up in stock (problems if increase in demand were to occur)
• reduce time between paying suppliers and getting money from customers (negotiate for longer credit period and give customers shorter credit period whilst keeping both happy)
• credit controllers keep debtors in control, reminds debtors to pay up
• debt factoring (instant injection of cash to business whose customers have not paid their invoices, agents keep small % of invoice)
• sake and leaseback (sell equipment to raise capital and then lease the equipment back when needed, only have to pay small sum to lease it)

Question 8

Organisational designs? How to improve them?

Answer 8

Tall organisational design, organisations with lots of levels to their hierarchy
ve -long chain of command thus messages takes long time to get from top to bottom etc and decisions can take a long time to make and lots of paperwork to deal with.
ve + managers have narrow span of control (may make employees demotivated as they are micro managed), aren’t responsible for too many people can monitor closely
*Flat organisational structure**, only have few levels in hierarchy, people given more responsibility and freedom.
ve - managers can get overwhelmed with wide spans of control, find it manage effectively if lots of workers are answering to them
ve + people given more responsibility and freedom

Can be improved through Delayering

Question 9

What are corporate objectives and examples of them?

Answer 9

Goals of business as whole depending on size of business such as survival, growth and diversifying

Question 10

Legislations and the environment

Answer 10

By being compliant with environmental laws it avoids damaging costs, avoids potential loss of brand reputation and can be seen as positive for consumers if business actively embraces protection of the environment