SAMPLE PAPER (TERM-I) 2021-2022

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CLASS – XII M. MARKS-40

SUBJECT – Business Studies DURATION-1.5 Hrs.
General instructions
• Read the following instructions very carefully and strictly follow them
• The question paper consists of 3 sections and 11 pages
• Section A has 24 questions. Attempt any 20 questions
• Section B has 24 questions. Attempt any 20 questions
• Section C has 12 questions. Attempt any 10 questions
• All questions carry equal marks.
• There is no negative marking.

Section - A
1. Centralisation refers to:
(a)Retention of decision - making authority (b) Dispersal of decision-making authority
(c) Creating divisions as profit centres (d) Opening new centres or Branches

2. Which of the following is the example of Shaving Cream?

(a) Primary Packing (b)Secondary Packing
(c) Transport packing (d) none of the above

3. ….……………… is the essence of Planning

(a) Organising (b) Controlling
(c)Forecasting (d) Directing

4. Which of the following is an example of social environment?

(a) Money supply in economy (b) Consumer protection Act
(c)The Constitution of the country (d) Composition of family.

5. ‘Products are not purchased but sold’, with which point of view this statement associated
(a) Product Concept (b) Selling Concept
(c)Production Concept (d) Marketing Concept

6. Identify the nature of management when it is practiced as personal application of existing Knowledge to
achieve desired results.
(a) Management is an art
(b) Management is a profession
(c) Management is a science
(d) Management is both art and science
7. In what situation has Fayol permitted the violation of the principle of Scalar Chain?
(a) When the employee is extraordinarily capable
(b) At the time of sudden happening
 (c) In all conditions and circumstances
(d) In no condition or situation
(e)
8. Marketing includes in it _______________ .
(a) Buying (b) Selling
(c) Storing (d) above all

9. Your uncle who has retired from an organisation in which he is responsible for implementing plans
developed by the top management. At which levels of management was he working?
(a) Top Management (b) Middle Management
(c) Operational Management (d) None of these

10. Grouping of activities on the basis of functions is a part of :

(a) Decentralised organisation (b) Divisional organisation
(c) Functional organisation (d) Centralised organisation

11. Match the ‘Importance of planning in coloum-I with their respective statements in Coloum II
Coloum – I Coloum - II
(a) Planning provides direction Planning shows the ways in deal with
changes
(b) Planning reduces the risk of uncertainty Planning helps in avoiding confusions
and misunderstanding
(C ) Planning reduces overlapping and Planning clarifies ‘how work is to be
wasteful activities done’
(a) (i), (ii), (iii) (b) (iii), (i), (ii)
(c) (iii), (ii), (i) (d) (i), (iii), (ii)

12. Name the process which provides the requisite amount, quality, timing and sequence of efforts and
ensures that planned objectives are achieved with minimum of conflict.
(a) Coordination (b) Planning
(c) Directing (d) Controlling

13. __________ makes flexibility available.

(a) Publicity (b) Advertisement
(c)Sales promotion (d) Personal Selling

14. The collection utilities is known as _______________

(a) Purchaser (b) Seller
(c) Product (d) Market

15. ‘More delegation of authority helps managerial development’. Out of which of the following with which
is the statement related to?
(a) Delegation (b) Decentralisation
(c) Centralisation (d) All of these

16. Which of the following is not a part of the internal environment?

 (a) Customers (b) Objectives
(c) Policies (d) Organisation Structure

17. ‘Three subordinates - S1, S2 and S3 receive orders from Mr A’. In such a situation which principle of
management is being observed?
(a) Equity (b) Order
(c) Unity of command (d) Unity of direction

18. __________ starts after the production of things.

(a) Buying (b) Selling
(c) Marketing (d) Advertising

19. Which of the following is not an element of delegation?

(a) Accountability (b) Authority
(c) Responsibility (d) Informal organisation

20. Which of the following is not the internal element of Limitation of Planning?
(a) Capital (b) Raw material
(c) Increase in population (d) Machine

21. Match the various terms relating to ‘Fixation of Price’ in Column-I with their respective statements in
column-II:

Coloum – I Coloum – II
(a) Product cost (i) Actually, it fixes the price of the
product.
(b) Utility (ii) It determines the upper limit of the
price
(C) Extent of competition (iii) It sets the lower limit of the price
(b) (iii), (ii), (i) (b) (ii), (i), (iii)
(c) (iii), (i), (ii) (d) (i), (ii), (iii)

22. Which of the following best indicates the importance of business environment?
(a) Identification (b) Importance in performance
(c) Coping with rapid changes (d) All of them

23. ____________ Principle of management increases the efficiency of subordinates?

(a) Scalar chain (b) Equity
(c) Effective centralisation (d) Unity of command

24. ___________ implies completing the work in hand irrespective of the cost.
(a) Effectiveness (b) Efficiency
(c) Planning (d) Controlling

Section - B
25. In order to be successful, an organisation must change itself and its goals according to the need of the
environment. Regarding this we have the example of McDonalds, the fast food giant made major
changes in its menu to be able to survive in the Indian market. Identify the characteristics of
management mentioned in the above case.
(a) Management is an intangible force (b) Management is a dynamic function
(c) Management is a group activity (d) Management is a continuous process

26. In Japanese companies, paternalistic style of management is in practice. There is complete openness
between management and workers. If all workers go to strike they wear a black badge but work more
than normal working hours to gain the sympathy of the management.
Name the principle of scientific management which is followed by the Japanese companies.
(a) Harmony, not discord
(b) Cooperation, not individualism
(c) Science, not rule of thumb
(d) Development of each and every person to his or her greatest efficiency and prosperity.

27. ‘Chandra Chemicals Ltd’. is a newly established company of its industry. The goals of the company
have been very well defined. The employees know what the organisation aims at doing and what they
should do for the realisation of the goal. The company did the planning in such a way that all the
departments and employees are able to work in coordination. This is the very result of successful
planning and the company is moving forward on the path of success.
On the basis of the event stated above, tell why planning is important.
(a) Planning provides direction
(b) Planning reduces the risk of uncertainty.
(c) Planning reduces overlapping and wasteful activities
(d) Planning promotes innovative ideas.
(e)
28. The objectives of the Marketing Department of ‘Sunderam Kids Wear Ltd’. is to increase sales by 10%
by offering discounts. But, the finance department may not approve of such discounts as a means of
revenue. These kinds of conflict arise in organisations because each department is performing activities
in isolation from others and barriers between departments are becoming more rigid.
Identify the point of difference of coordination to which this case is related:
(a) Growth in size (b) Functional differentiation
(c) Specialisation (d) None of these

29. Every organisation desires that it should have goodwill in the minds of all concerned. To establish
goodwill, it is essential to have a dialogue. It is by the way of dialogue that an organisation gets the
necessary information. How is it possible?
(a) Through public relations (b) Functional differentiation
(c)Specialisation (d) Through personal selling

30. A petrol pump needs to be managed as much as a hospital or a school. What managers do in India, the
USA, Germany or Japan is the same. How they do it may be quite different, this difference is due to the
difference in culture, tradition and history. Identify the characteristics management that has been
mentioned here.
(a) Management is a goal oriented process (b) Management is all pervasive
 (c ) Management is multi-dimensional (d) Management is a continuous process.

31. It is the belief of ‘Suvidha garments Pvt Ltd’. that if the quality of goods/services is good then the
customers can easily be attracted. The basis of this thinking is that the customers get attracted towards
the product of good quality. On the basis of this thinking the company directs its marketing efforts
improving the quality of the product. Identify the marketing philosophy as mentioned in para.
(a) Product philosophy (b) Selling philosophy
(c) Marketing Philosophy (d) Production Philosophy

32. National Vritech Ltd. has grown in size. It was a market leader but with changes in business
environment and with the entry of MNCs, its market share is declining. To cope up with the situation
CEO starts delegating some authority to the General Manager, who also felt himself overburden and
with the approval of CEO disperses some of his authority to various levels throughout the organisation.
Identify the concept of management discussed above.
(a) Delegation (b) Organising
(c)Decentralisation (d) Centralisation

33. Mr Shyam Sagar is working as the manager of ‘Sagar Foods Ltd’. The general goal of establishing his
company was to be leader of ‘Food Industry’. Mr Sagar determined the activities his company and plans
for realisation of the general goal. In the plans themselves he determined the specific goals also. He
knew it very well that the planning done by him was of no significance if he failed to contribute to the
realisation of pro-determined organisational objectives. This was the very reason that he did everything
with full alertness. Identify the feature of planning described in the above discussion
(a) Planning focuses on achieving objectives.
(b) Planning is a primary function of management.
(c) Planning is pervasive.
(d) Planning is continuous.
(e)
34. Ashoka handloom Industries is a company specially manufactures bed-covers/bed-sheets. Mr Ashok
Khandhidhari is the production manager in the company. His design team developed some prints for
bed-covers on bright colours on silk. Although they looked very impressive, the use of silk made the
product too expensive for the average customer. Praising their effort, Mr Ashok suggested that they
keep the silk bed-covers for special occasions like Diwali and Christmas and offer bed-covers on regular
basis. Name the main function of management to which is in the above case is related
(a) Planning (b) Organising
(c) Directing (d) Controlling

35. Before buying a thing a customer analysis its cost and the satisfaction that he is to get from it. He will
buy the thing only when he feels that its satisfaction will be more than its cost. Seller is to make the
thing while keeping in mind this tendency of the buyer. A seller, who does not pay heed to the
importance that the buyer gives to the product, certainly lags behind in competition.
Which feature of marketing has been highlighted in the above paragraph?
(a) Customer value (b) Need and Want
(c) Creating a market offering (d) Exchange mechanism
36. Super Fine Rice Ltd. has the largest share of 55% in the market. The company’s policy is to sell only for
cash. In 2015, for the first time company’s number one position in the industry has been threatened
because other companies started selling rice on credit also. But the managers of Super Fine Rice Ltd.
continued to rely on it’s previously tried and tested successful plans which didn’t work because the
environment is not static. This let to decline in sales of Super Fine Rice Ltd.
The above situation is indicating two ‘limitations of planning’ which led to decline in its sales. Identify
one of them.
(a) Planning creates rigidity (b) Planning reduces creativity
(c) Planning involves huze costs (d) Planning does not guarantee success.

37. Once the ‘Sharada Club. Delhi’ organised ‘Health Care Week’ for its members. It had a very positive
effect on its members. Now the members had become more careful about their health than earlier. Not
only this, the members also acquainted the people outside the club and take advantage out of it. The
changing attitude of the people towards health was visible in the market also. Now a great demand for
sugar free products, fat free cooking oil and diet coke rose in the market. The manufacturers had to
immediately increase their production. ‘Sharada Food Producers, Delhi’ bought/launched these products
in the market first of all and earned a great profit. Which particular ‘feature of business environment’
does the event described above acquaint us with?
(a) Dynamic Nature (b) Inter-relatedness
(c) Totality of external Forces (d) Specific and General Forces

38. ’Nagia Steel Pvt. Ltd.’ has divided the whole of its business into five departments. Now the Company’s
General Manager is telling all the employees what different jobs are to be done by them. While giving
the jobs to the employees, the nature of job and the person’s ability is especially being taken into
account. This also has been pre-determined who will report to whom. This makes it clear who is
superior/senior and who is subordinate. Identify the function of management highlighted here.
(a) Organising (b) Planning
(c) Controlling (d) Staffing

39. Mrs Madhavi Bhire is working as a manager in ‘Taarik and Company’. She is involved in a problem
related to a particular product. She is unable to decide whether she should produce that product in her
own company or she should buy it from market. She studied both the options deeply with the help of
specialists. In order to maintain the company’s impression on the minds of the customers, she decided to
produce the product in the company itself. She is hopeful of the complete success of this decision.
Identify the stage of ‘planning process’ on which Mrs Madhavi reached the final decision.
(a) Evaluating alternative courses (b) Selecting the alternative
(c) Implementing the Plan (d) Follow-up action
40. The General Manager of ‘Uttaranchal Wood Pvt. Ltd.’ called a meeting of the production Manager and
Sales Manager both of his company. He explained to them that both of these departments are the base of
the company’s success. Therefore, it is very necessary for both of them to work with coordination. Also,
they were told that whatever decision they took for their respective departments; which could affect
others, they must give its information to them immediately. They did the same. As a result of this, there
never arose a situation in the company, when the sales orders could not be complied with because of the
shortage of goods. Identify the characteristic of coordination in the in the paragraph above.
(a) Coordination is a continuous process
(b) Coordination ensures unity of action
 (c) Coordination is a deliberate function
(d) Coordination is an all pervasive function

41. In a factory, a product is manufactured, in a garment store a customer’s need is satisfied and in a
hospital a patient is treated. Management translate their work in terms of goals to be achieved and assign
the means to achieve it. Identify the dimension of management discussed here.
(a) Management of operations (b) Management of people
(c) Management of work (d) none of the above

42. A sales person Mr Ram of Gupta & Gupta Sales Ltd. is asked to clinch a deal with the buyer and is
allowed to give 8% discount by the marketing manager. But finance department tells him not to offer
more than 5% discount. Which principles of management is violated here?
(a) Unity of the direction (b) Centralisation and decentralisation
(c ) Division of work (d) Unity of command

43. For the following two statements choose the correct option.
Statement I: Marketing is not such an activity as is done post production.
Statement II: For publicity, the manufacturer has not to incur any expenditure.
Choose the correct option from the options given below:
(a) Statement I is correct and statement ii is wrong.
(b) Statement ii is correct and statement i is wrong
(c) Both Statements are correct.
(d) Both Statements are incorrect.
(e)
44. Miss Bindu is working as a Production Manager in a company. She divided the work among her
subordinates in accordance with their interest and ability. Not only this, she even gave them all the
authorities to take decisions relating to their work. At the end of the first month of the year it was found
that Mr Raj Sabharwal had not achieved his target. He was lagging far behind his target. Miss Bindu
asked him to give reason within two days why his performance was low. With which concept of
management the conversation between Miss Bindu and Mr Raj referred to in the above paragraph is
related. Identify it.
(a) Authority (b) Accountability
(c ) Responsibility (d) None of these.

45. Mr Raj Kumar Garg and Mr Mohan Kumar Goyal are working as General Managers respectively in
‘Gupta and Gupta Ltd,’ and ‘Kumar and Kumar Limited’. Mr Garg’s nature is to keep a close eye on the
business environment. He pays attention to great and small changes taking place in the market and
prepared himself well in time. On the other hand, Mr Goyal, by nature is indifferent to business
environment. He thinks that he will not go after the business envirournment but make it follow him.
Within few days, it was learnt that ‘Gupta and Gupta Limited’ had become the leader of the companies
of similar type whereas ‘Kumar and Kumar Limited’ was becoming obsolete in the market.
Identify the point of ‘importance of business environment’ which is referred to by the incident stated
above.
(a) It helps in assisting in planning and policy formulation.
(b) It helps in improving performance
(c) It helps in tapping useful resources.
 (d) It helps in coping with rapid changes.
(e)
46. Mr Sanjiv Gupta decided to double the production of his company. Now he is going to translate his
decision into reality. Here, he is also thinking how many additional/extra machines and workers will be
required to achieve the production target. His dream will be possible to be realised only after the
arrangement for these extra sources is done.
Which stage of ‘Planning Process’ is being completed by Mr Gupta in the above event?
(a) Evaluating alternative courses (b) Selecting an alternative
(c) Implementing the plan (d) Follow-up action.

47. In the end of the year 2019, there started a pandemic by the name Corona spreading in the world. In the
year 2020, it took the world in its fold. In India, also its effect was seen. Due to the lockdown,
continuing for months together, India’s economy got ruined. For the improvement of economy, the
government took a number of steps. One of the major steps was to reduce the interest rate heavily on
long-term loan. Due to the heavy reduction in the interest rate, some people started constructing houses
and some of them started buying the vehicles like cars, etc. In both these sectors one noticed a great
demand. As a result, the economy, which was getting ruined, got some help to come up. What do you
learn from the above event about the important point of general business environment related to the
reduction in interest rate?
(a) Economic Environment (b) Social Environment
(c) Technological Environment (d) Political environment

48. Assertion (A : Standardisation reduces the need for inspection, testing and evaluation of the products
Reason (R) : Standardisation ensures the buyers that goods conform to predetermined standards of
quality, price, packing, etc.
(a) Both (A) and (R) are true, and R is the correct explanation of A.
(b) Both (A) and (R) are true, and R is not the correct explanation of A.
(c) (A) is true but (R) is False.
(d) (A) is false but (R) is true.
Section C
Read the text given below and answer the questions (49-54) based on it.
After acquiring the necessary knowledge and skills on starting an Aloevera farm, Ashok wanted to be
the leading manufacturer of Aloevera products worldwide.
After gathering and analysing information and doing correct market planning, he came to know that
consumers compare the value of the product
To the value on money they are required to pay. The consumers will be ready to buy a product when
they perceived that the value of the product is at least equal to the value of the money which they would
pay. Since he was entering into a new market, he felt that he may not be able to cover all costs. He knew
that in the long run the business will not be able to survive unless all costs are covered in addition to a
minimum profit. He also thought that competitor’s prices and their anticipated reactions must also be
considered for this.
He examined the quality and features of the product of the competitors and anticipated reactions of the
consumers. Considering the same he decided to add some unique features to the packing and also
decided to provide free home delivery of the products.
In the above paragraph factors about the ‘Fixation of Price of any Product’ are highlighted. Match the
factors determining price with relevant statements.
49. “The consumers will be ready to buy a product when they perceived that the value of the product is at
least equal to the value of money they would pay.”
(a) Pricing objectives (b) Utility and demand
(c) Extent of competition in the market (d) Marketing method used

50. “He knew that in the long run the business will not be able to survive unless all costs are covered in
addition to a minimum profit.”
(a) Pricing objectives (b) Utility and demand
(b) Extent of competition in the market (d) Marketing method used

51. ” He also thought that competitor’s prices and their anticipated reactions must also be considered for
this.”
(a) Pricing objectives (b) Utility and demand
(b) Extent of competition in the market (d) Marketing method used
(c)
52. ” Considering the same he decided to add some unique features to the packing and also decided to
provide free home delivery of the products.”
(a) Pricing objectives (b) Utility and demand
(c ) Extent of competition in the market (d) Marketing method used

53. Identify the factors about the ‘fixation of price of any product’ which is not highlighted here
(a) Pricing objectives (b) Utility and demand
(c) Extent of competition in the market (d) Marketing method used

54. Statement I: The consumers compare the value of a product to the value of money they are required to
pay.
Statement II : At the time of fixing the price of the product, there is no need to consider the
competitor’s prices.
Both the above statements are:
(a) True
(b) False
(c) Statement (I) is true and Statement (II) is false
(d) Statement (I) is false and Statement (II) is true

55. The production manager of ABC Ltd. Instructs a salesman to go slow in selling the product. whereas
marketing manager is insisting on fast selling to reach the target. Which principle of management is
being violated in this case?
(a) Unity of command (b) Utility of direction
(c) Equity (d) Order

56. ’Sarika Motors Limited’ is a famous vehicle manufacturing company. The Research and Development
Department of the company is very strong. The manager of the Department, Mr Gopal Rai, keeps a
sharp eye on the business environment. On the basis of the data given by the government he has
concluded that the pollution level in the country is rising very fast and that the vehicles running on
petrol and diesel contribute a lot into it. Keeping this fact in mind Mr Rai developed such an engine as
 ran of air pressure. The Company used this engine, first of all, in cars, which proved to be completely
successful. The cars were expensive, but the company got full support from the market. From the
Government also, several concessions in the taxes, power rate, etc were available. The company earned
a huge profit. Afterwards, several other companies also followed this technique, but no other company
got as much fame as was got by ‘Sarika Motors’.
Identify the point of ‘importance of business environment’ in the event described above?
(a) It helps the firm in identifying the threats and early warnings.
(b) It enables the firm in identifying opportunities and getting the first mover advantage’
(c) It helps in tapping useful resources.
(d) It helps in coping with rapid changes.

57. Saurabh decided to start a chocolates manufacturing business. He set the target on earning 10% profit on
sales in the first year. As a good businessman, he was concerned about the future of the business, which
was uncertain. He gathered information that the demand for chocolates is increasing day to day. He used
this information as the base for future planning and shared it with his team. On the basis of the gathered
information, he scheduled a meeting in the following week to find innovative ways to achieve the
objectives.
Identify one out of the two steps, which have been followed by Saurabh that are related to the process of
one of the functions of management.
(a) Follow up action (b) Selecting an alternative
(c) Developing Premises (d) Evaluating alternative courses

58. According to Fayol, “Organisations should have a chain of authority and communication that runs from
top to bottom and should be followed by managers and subordinates”. According to Fayol, this chain
should not be violated in the normal course of formal communication.
Match the statement given by Fayol with his principles of management.
(a) Equity (b) Unity of command
(c) Order (d) Scalar chain

59. ‘Riya Health Care Limited’, established with the objective of taking care of people’s health, was a new
company. This was the first company of this type established in its field. There being no competition in
the market was something good for the company. But the company’s business was about to pick up.
When several competing companies got established in that field. Consequently, the comfortable position
of the company came to an end. Hardly two years had gone by since the company was established, when
there occurred a big change in the priorities of the customers. Now they got temped towards the local
health promoting products instead of the company’s products. In this way, the company had to face
great difficulty to keep itself established in the market. Which features of business environment does the
above event acquaint us with?
(a) Dynamic Nature (b) Inter-relatedness
(c) Total of External Forces (d) Specific and General Forces

60. Sanjivan Madan is working as the sales manager in the ‘Sharada Shopping Mail”. He is preparing a
sales plan for his department. He is taking the help of forecast as the base of the form of his sales plan.
He is of the view that a good plan can be prepared by learning about the possibilities of future events
and conditions through the medium of forecast. The plan being prepared by sanjivan is very important
as the production plan and other plans of business are prepared on this very basis.
Identify the feature of planning in above event.
(a) Planning is continuous (b) Planning is futuristic
(c) Planning involves decision making (d) Planning is pervasive