2020

Higher School Certificate

Trial Examination

Business Studies
Total marks – 100

Section I – Pages 2–7

General Instructions 20 marks
● Attempt Questions 1–20
● Reading time – 5 minutes ● Allow about 35 minutes for this section
● Working time – 3 hours
Section II – Pages 8–14
● NESA approved calculators may be used 40 marks
● Attempt Questions 21–24
● Write using black pen
● Allow about 1 hour and 15 minutes for this
● Write your student number and/or name at the top section
of every page
Section III – Page 15
20 marks
● Attempt Question 25
● Allow about 35 minutes for this section

Section IV – Page 16
20 marks
● Attempt either Question 26 OR
Question 27
● Allow about 35 minutes for this section

This paper MUST NOT be removed from the examination room

STUDENT NUMBER/NAME:…………………..….
 STUDENT NUMBER/NAME: ……………………..

Section I

20 marks
Attempt Questions 1–20
Allow about 35 minutes for this section

Select the alternative A, B, C or D that best answers the question and indicate your choice with
a cross (X) in the appropriate space on the grid below.

A B C D

10

11

12

13

14

15

16

17

18

19

20

Page 2
 STUDENT NUMBER/NAME: ……………………..

1 A hairdressing business offers customers discounts and other benefits when they spend
over $70 in the salon.

Which type of marketing approach is being used?

A. Marketing concept
B. Production concept
C. Relationship marketing
D. Corporate social responsibility

2 A clothing company requires their designers to study the global fashion market to gather
ideas before starting their new collection.

What is this policy an example of?

A. Research and development

B. Global branding
C. Economies of scale
D. Scanning and learning

3 Which organisation lobbies the government for improved working conditions and wage
increases for Australian employees?

A. Australian Council of Trade Unions

B. Australian Chamber of Commerce
C. Business Council of Australia
D. Industry Association of Australia

4 Which of the following inputs is classified as a transforming resource?

A. Customers
B. Information
C. Facilities
D. Materials

Page 3
 STUDENT NUMBER/NAME: ……………………..

5 Which independent government organisation is responsible for maintaining a safety net

of minimum wages and employment conditions?

A. Fair Work Commission

B. Industrial Commission
C. The Ombudsman
D. Australian Human Rights Commission

6 Natalia’s friends tell her a particular ‘beauty brand’ makes the best quality makeup.
Natalia buys this makeup because of her friends’ opinion of the makeup.

Which factor has influenced her decision?

A. Economic
B. Government
C. Financial
D. Sociocultural

7 Which type of market consists of those engaged in primary production?

A. Industrial market
B. Intermediate market
C. Primary market
D. Resource market

8 Management of a florist, located in NSW, is looking to expand and open up shops

interstate.

Which type of funding would be most appropriate for this expansion?

A. Commercial bill
B. Credit card
C. Mortgage
D. Overdraft

Page 4
 STUDENT NUMBER/NAME: ……………………..

9 Employees and management agreed to meet with a neutral third party who helped them
agree to a non-binding resolution to a dispute.

Which strategy has been used to settle this dispute?

A. Arbitration
B. Common law
C. Mediation
D. Negotiation

10 Logistics refers to which of the following aspects of supply chain management?

A. Pricing, storage and transportation

B. Transportation, storage and warehousing
C. Warehousing, marketing and storage
D. Storage, production and distribution

11 What is the main advantage of global branding?

A. The brand development is not expensive.

B. The brand is positioned within a niche market.
C. The brand eliminates competition from the market.
D. The brand is easily recognisable regardless of language.

12 Which of the following is a secondary source of data used in market research?

A. Experimental research
B. Government publications
C. Observational research
D. Surveys and questionnaires

13 Which of the following refers to the expenses associated with meeting legal
responsibilities?

A. Accounting fees
B. Commercial costs
C. Compliance costs
D. Legal fees

Page 5
 STUDENT NUMBER/NAME: ……………………..

14 Which human resource management process involves the recruitment and placement of
employees?

A. Acquisition
B. Development
C. Maintenance
D. Separation

15 There has been a global economic downturn.

Which of the following would most likely occur in the Australian workplace?

A. Increase in monetary payments and non-monetary benefits

B. Increase in spending on training and development programs
C. Decrease in involuntary staff turnover
D. Decrease in voluntary staff turnover

16 A car manufacturer wants to reduce lead times between when a customer orders a new
vehicle and when it is delivered.

Which performance objective is the business trying to achieve?

A. Customisation
B. Flexibility
C. Speed
D. Quality

17 Which of the following combinations is most likely to reduce Australia’s volume of

exports?

Australian dollar Global economy

(A) Appreciation Slowing economic growth rate

(B) Depreciation Slowing economic growth rate

(C) Appreciation Increasing economic growth rate

(D) Depreciation Increasing economic growth rate

Page 6
 STUDENT NUMBER/NAME: ……………………..

18 A mining company records their research and development as an asset, rather than an
expense.

Which limitation of financial reports does this represent?

A. Normalised earnings
B. Capitalising expenses
C. Valuing assets
D. Timing issues

19 The table shows the financial ratios for Change Removalist Pty Ltd in 2018 and 2019.

Year Gross Profit Net Profit Expense Ratio

2018 60% 30% 50%
2019 60% 20% 60%
Industry Average 2019:
Gross Profit: 60%
Net Profit: 35%
Expense Ratio: 54%

Which of the following is true of the efficiency ratio for Change Removalist Pty Ltd in
2019?

Compared to industry average in

Compared to efficiency in 2018
2019

(A) Worse Better

(B) Worse Worse

(C) Better Better

(D) Better Worse

20 A business is looking to increase its equity finance and has offered existing shareholders
the opportunity to purchase additional shares in the company at a discounted price.

What type of shares are these?

A. New issue
B. Rights issue
C. Private equity
D. Public equity

Page 7
 STUDENT NUMBER/NAME: ……………………..

Section II

40 marks
Attempt Questions 21–24
Allow about 1 hour and 15 minutes for this section

Answer the questions in the spaces provided. These spaces provide guidance for the expected
length of response.

Question 21 (8 marks) Marks

(a) Outline the strategic role of human resources management. 2

(b) With reference to a case study, explain why a business exhibits corporate social 6
responsibility when developing human resource strategies.

Page 8
 STUDENT NUMBER/NAME: ……………………..

Question 22 (10 marks) Marks

(a) Outline TWO ethical criticisms of marketing. 4

(i)

(ii)

(b) With reference to a case study, explain how globalisation has impacted marketing 6
strategies for a global business.

Page 9
 STUDENT NUMBER/NAME: ……………………..

Question 23 (11 marks) Marks

Fun times Pty Ltd is a toy manufacturer that sells direct to retail stores. Recently there has
been an increase in the number of faulty toys being returned due to poor quality.
The company struggles to meet demand for product and retailers have stock shortages.

(a) Describe the interdependence between operations and finance for this business. 3

(b) Explain how TWO sequencing or scheduling tools can assist Fun Times Pty Ltd 4
better meet the demand for their products.

Question 23 continues on the next page

Page 10
 STUDENT NUMBER/NAME: ……………………..

Question 23 continued Marks

(c) Recommend TWO quality management strategies that can be used by Fun Times Pty 4
to improve their performance.
(i)

(ii)

End of Question 23

Page 11
 STUDENT NUMBER/NAME: ……………………..

Question 24 (11 marks) Marks

Balance sheet as at 30th June, 2020 for GG Stationary Supplies Pty Ltd

ASSETS LIABILITIES

Current assets Current liabilities

Cash at bank 225 000 Accounts payable 240 000

Stock 300 000
Accounts receivable 217 500

Non-current Non-current liabilities

assets
Mortgage 1 125 000
Motor vehicles 215 000
Equipment 100 000 OWNER’S EQUITY
Plant 1 350 000
Owner’s capital 300 000
Undistributed profits 742 500

TOTAL 2 407 500 TOTAL 2 407 500

Income Statement for the period ending 30th June, 2020 for GG Stationary Supplies Pty Ltd

Sales 2 700 000

GOGS 1 050 000
Gross profit 1 650 000
Total expenses 1 200 000
Net profit 450 000

Industry averages

Liquidity ratio: 2:1

Expense ratio 30%
Accounts receivable turnover ratio: 20 days

Question 24 continues on the next page

Page 12
 STUDENT NUMBER/NAME: ……………………..

Question 24 continued Marks

(a) Distinguish between short-term and long-term financial objectives for a business. 2

(b) Using the current ratio, calculate and comment on the liquidity of GG Stationary 3
Supplies Pty Ltd.

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑎𝑠𝑠𝑒𝑡𝑠
Current ratio = 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

Question 24 continues on the next page

Page 13
 STUDENT NUMBER/NAME: ……………………..

Question 24 continued Marks

(c) Examine the efficiency of GG Electronics Pty Ltd. Use data from the account’s 6
receivable turnover ratio and expense ratio to support your answer.

𝑆𝑎𝑙𝑒𝑠
Accounts receivable turnover ratio = 𝐴𝑐𝑐𝑜𝑢𝑛𝑡𝑠 𝑟𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒

𝑇𝑜𝑡𝑎𝑙 𝑒𝑥𝑝𝑒𝑛𝑠𝑒𝑠
Expense ratio = 𝑆𝑎𝑙𝑒𝑠

End of Question 24

Page 14
 STUDENT NUMBER/NAME: ……………………..

Section III

20 marks
Attempt Question 25
Allow about 35 minutes for this section

Answer the question on a SEPARATE page of your own paper or writing booklet, if provided.

The expected length of response is approximately six written pages or 800 words.

In your answer you will be assessed on how well you:

▪ demonstrate knowledge and understanding relevant to the question

▪ apply the hypothetical business situation

▪ communicate using relevant business terminology and concepts

▪ present a sustained, logical and cohesive response in the form of a business report

Question 25 (20 marks)

Claudic Appliances Pty Ltd manufactures home appliances. Management uses the
classical/authorative approach to leadership. Recently, sales and market share have declined.

The business is considering more cost-effective ways of manufacturing. Management is

concerned employees will resist this change as it may result in redundancies, retraining,
uncertainty and fear of the unknown.

Management has also identified:

- Low staff morale
- An increase in staff turnover and absenteeism over the past 2 years
- An increase in workplace disputes

Assume that you have been hired as a consultant.

Write a report to the directors of this business in which you:

● Explain how the business can manage this change effectively

● Recommend appropriate human resource strategies, which could be used to improve
Claudic Appliances’ performance

Page 15
 STUDENT NUMBER/NAME: ……………………..

Section IV

20 marks
Attempt EITHER Question 26 OR Question 27
Allow about 35 minutes for this section

Answer the question on a SEPARATE page of your own paper, or writing booklet if provided.

The expected length of response is approximately six written pages or 800 words.

In your answer you will be assessed on how well you:

▪ demonstrate knowledge and understanding relevant to the question

▪ apply relevant business case study/studies and contemporary business issues

▪ communicate using relevant business terminology and concepts

▪ present a sustained, logical and cohesive response

EITHER

Question 26 (20 marks)

Explain how global markets and the government influence the financial management of a
business.

OR

Question 27 (20 marks)

Explain how the marketing mix is used to assist a business achieve its marketing objectives.

End of paper

Page 16