Cambridge International Examinations

Cambridge International General Certificate of Secondary Education

*1910087841*

BUSINESS STUDIES 0450/21

Paper 2 October/November 2018
1 hour 30 minutes

Candidates answer on the Question Paper.

No Additional Materials are required.

READ THESE INSTRUCTIONS FIRST

Write your Centre number, candidate number and name in the spaces at the top of this page.
Write in dark blue or black pen.
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Do not use staples, paper clips, glue or correction fluid.
DO NOT WRITE IN ANY BARCODES.

Answer all questions.

The Insert contains the case study.
The businesses described in this question paper are entirely fictitious.

At the end of the examination, fasten all your work securely together.
The number of marks is given in brackets [ ] at the end of each question or part question.

The total number of marks for this paper is 80.

This syllabus is approved for use in England, Wales and Northern Ireland as a Cambridge International Level 1/Level 2 Certificate.

This document consists of 9 printed pages and 3 blank pages.

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1 (a) Identify and explain two advantages and two disadvantages of GT being a public limited
company.

Advantage 1: ....................................................................................................................
It has the limited liability of the shareholders is limit to the amount of capital invested in the business
...........................................................................................................................................

Explanation: ......................................................................................................................

In case the business fails the shareholders will not have sell their person belongings to repay loans
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Incorporated, meaning having separate legal identity

Advantage 2: ....................................................................................................................

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It means the in case one shareholder dies the business will not shut down
Explanation: ......................................................................................................................

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Many legal requirements like:- Certificate of Association, Menomedom of association

Disadvantage 1: ................................................................................................................

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GT has to provide the documents before it starts trading.

Explanation: ......................................................................................................................

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Divorce of ownership and control between shareholders and owner

Disadvantage 2: ................................................................................................................

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Since GT would have many shareholders they can’t run the company themselves
Explanation: ......................................................................................................................
they have to employ directors therefore bring up the separation of ownership and
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(b) Consider the advantages and disadvantages of the following two options for distributing GT
products. Recommend the option GT should choose. Justify your answer.

Continue selling to large shops: .......................................................................................

Text
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Only sell its products using e-commerce: .........................................................................

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Recommendation: ............................................................................................................

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2 (a) Identify and explain two roles of the Operations manager at GT.

Planning the production such as setting a target of an increase

Role 1: ..............................................................................................................................
of 10% in output of toy production
...........................................................................................................................................

the production of toys in the GT factory. (ap) This gives a

Explanation 1: ...................................................................................................................
sense of direction and purpose to the operations
...........................................................................................................................................
department, as they will all have a common purpose to
work towards. (an) The output of toys should therefore
...........................................................................................................................................
go more smoothly as the correct components to make
the toy cars should arrive on time to be ready for
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assembly on the production line.
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the tasks done by the production line workers such as
Role 2: ..............................................................................................................................
deciding which worker will fit heads onto the figures and which ones will
package the dolls
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The manager will allocate responsibility to

Explanation 2: ...................................................................................................................
employees. The manager will try to fit employees
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in there best skills, then the manager will
delegate the tasks to reach the production and to
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package all the dolls in a faster way.
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(b) Consider the following three ways GT can reduce the average cost of products. Recommend
the best way to choose. Justify your answer.

Change to a cheaper supplier of raw materials: ...............................................................

It can Lower the costs of purchasing raw materials.however it

...........................................................................................................................................
takes time to find a new supplier and it takes time to build up a
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new relationship with supplier.
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Change the design of products so that they need fewer components: ............................

It is quicker to assemble each toy however it may affect the

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performance of the toy if it moves and the toys may lose some
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of its quality.
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Change from batch production to flow production: ...........................................................

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There will be a much larger output produced and the unit costs will
fall...........................................................................................................................................
however there will be a high cost of installing machines and it will
be less able to respond to changes in styles of toys.
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Recommendation: ............................................................................................................
I would recommend to use the change from batch production to
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flow production as the lower unit costs allows lower prices and
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more competitive
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3 (a) Identify and explain two factors GT should consider when developing products for markets in
different countries.

Factor 1: ...........................................................................................................................

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Explanation: ......................................................................................................................

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Factor 2: ...........................................................................................................................

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Explanation: ......................................................................................................................

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(b) Consider how the following three communication issues affect GT. Which one of these issues
is likely to cause the biggest problem for GT? Justify your answer.

Different languages are spoken in GT’s markets in other countries: ................................

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GT is starting to use several new suppliers: .....................................................................

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GT’s main communication method with its production workers is a weekly meeting: ......

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Conclusion: .......................................................................................................................

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4 (a) Identify and explain one effect on GT and one effect on GT’s employees of workers being
members of a trade union.

Effect on GT: .....................................................................................................................

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Explanation: ......................................................................................................................

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Effect on GT’s employees: ...............................................................................................

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Explanation: ......................................................................................................................

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(b) Refer to Appendix 3. Consider how the information in Appendix 3 will help the following three
users of accounts. Which user will find the information most helpful when taking decisions?
Justify your answer.

Shareholders of GT: ..........................................................................................................

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Managers of GT: ...............................................................................................................

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Competitors of GT: ............................................................................................................

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Conclusion: .......................................................................................................................

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