Paper 1 : May/June 2023 – 12

Instructions:

• Carefully review all given instructions and past paper guidelines before starting each practice session.

• Attempt the past paper questions independently first, just as in an actual exam environment.

• Use a notebook or exam-style sheets to write your answers. Ensure your work is neat, clearly labeled with question numbers, and follows proper exam format.

• After completing each section, check your answers using the provided marking schemes and examiner reports (if available).

• Review your mistakes and rewrite incorrect answers to improve accuracy and exam technique.

• If you find any questions difficult or unclear, watch the video given below for that paper. In that video, each paper is discussed in detail.

• If you still face difficulties or have doubts after watching the video, note them down and discuss them with your instructor or course coordinator for clarification.

• Revise question-solving strategies and repeat similar past paper questions to strengthen your understanding and performance.

Click Here to download the Video Handout

Hi everyone. Welcome to today’s Business Studies class.
We are going to go through a full O Level past paper together. The paper has four short case studies. The first one is about FBW, the second about Gloria, the third about VVA, and the last one about CPF.
I will say each question number and part, explain what kind of answer the examiner expects, and share some simple techniques that help you get the highest marks.

Let’s begin with Question 1 about FBW.

Question 1(a) asks: identify two reasons why a business might offer training to its employees.
Here you can simply write, one, to improve employee productivity and reduce errors, and two, to help workers stay updated with new methods or technology.
You do not need to explain. Just list the two reasons clearly for two marks.

Question 1(b) says: calculate the break-even output and break-even revenue using Figure 1.1.
You must read the figures directly from the chart. The break-even output is 400 units and the break-even revenue is 80 thousand dollars.
Always show how you found your answer because one mark is for the correct working and one for the correct number.

Now Question 1(c) asks: outline two possible effects on FBW’s break-even chart if the price of its products increases.
Effect one, the total revenue line becomes steeper because each unit earns more income.
Effect two, the break-even point moves to the left because fewer units are needed to cover total costs.
For outline questions, write one sentence to identify the effect and another short one to describe what happens next.

Next, Question 1(d) asks: explain two benefits to FBW of having full-time employees.
Benefit one is stronger commitment and reliability. Full-time workers usually care more about the business and deliver higher quality.
Benefit two is more flexibility and consistency. Full-time employees know the business well and can work regular schedules which helps maintain steady production.
For explain questions, always show cause and effect. Write what happens and then how it benefits the business.

Finally, Question 1(e) asks: do you think job production is the best method of production for a small business to use?
Here you need both sides. Job production allows FBW to make customised high-quality watches which pleases customers. It is perfect for small firms producing limited quantities.
On the other hand, it is slower and more expensive, which limits how much FBW can produce.
The conclusion could be that for a business making 600 watches per year, job production works well now but would not suit large-scale demand.
A clear and balanced judgement is what earns the top marks.

Now let’s move on to Question 2, which is about Gloria, a sole trader.

Question 2(a) says: identify two ways a business plan can help reduce risk.
You can say it helps the owner set clear objectives and forecasts, and it helps spot problems early before they grow.

Question 2(b) asks: identify two reasons why a business might want to expand.
You can write, one, to increase revenue and market share, and two, to gain economies of scale, which means lowering the cost per unit when producing in larger quantities.

Question 2(c) asks: outline one advantage and one disadvantage to Gloria of using telephone calls as a method of communication with employees.
The advantage is that it is quick and allows immediate feedback.
The disadvantage is that it gives no visual cues and there is no record, which can cause confusion.

Question 2(d) asks: explain two factors Gloria should consider before taking on a business partner.
The first factor is skills and experience. The partner should bring new strengths that help the business grow.
The second factor is trust. Gloria needs someone reliable because profits and decisions will be shared.

Question 2(e) says: explain two methods of primary market research a business could use to find demand for a new product, and decide which is best.
You can say questionnaires are useful for collecting structured answers from many people, while interviews provide detailed opinions from fewer people.
Your conclusion could be that questionnaires are best for Gloria because they are cheaper, faster, and reach more customers.
Always remember to justify your choice at the end for full marks.

Now Question 3 is about VVA, a manufacturing company involved in trade and distribution.

Question 3(a) asks: define import tariff.
You can write that an import tariff is a tax on goods coming into a country which makes them more expensive and helps protect local businesses.

Question 3(b) says: identify two reasons why some markets can become more competitive.
You can say new firms enter the market, and technology advances that reduce barriers to entry.

Question 3(c) asks: state the four stages of the business cycle.
They are boom, recession, slump, and recovery. The order is not important as long as all four are mentioned.

Question 3(d) asks: explain one possible effect of import quotas and one effect of appreciation of the exchange rate.
Import quotas limit how much VVA can import, which might cause shortages and higher costs. This may force VVA to buy from expensive local suppliers or produce less.
An appreciation of the exchange rate means imported raw materials become cheaper. This lowers costs and can increase profit margins.

Question 3(e) says: do you think retailers are the best channel of distribution for a manufacturing business?
Retailers give wide access to customers and handle marketing, but they also take a share of the profit and reduce control over how the product is presented.
A good conclusion is that retailers work best for large markets, but for niche products or higher profit margins, direct online sales might be better. A mix of both channels could be ideal.

Finally, Question 4 is about CPF which deals with finance, stakeholders, and growth.

Question 4(a) asks: define retained profit.
You can say retained profit is the profit kept in the business after paying tax and dividends, used for reinvestment.

Question 4(b) says: define current assets.
These are assets that can be turned into cash within one year, such as cash, debtors, or stock.

Question 4(c) asks: outline two reasons why working capital is important.
Reason one is that it allows the business to pay for everyday expenses like wages, rent, or bills.
Reason two is that it ensures operations run smoothly without delays caused by cash shortages.

Question 4(d) says: explain one way each stakeholder group might be affected by expansion.
For employees, expansion can mean more job opportunities or promotions because the business will need more staff.
For suppliers, expansion means more orders and higher income because CPF will need to buy more materials.
Always explain how each stakeholder benefits or is affected.

The last one, Question 4(e), asks: do you think it is better for a private limited company to use debt, such as a loan, or equity, such as issuing more shares, as a source of long-term finance?
Loans allow the owners to keep full control, but they must be repaid with interest.
Equity, or selling more shares, brings in money without repayment but reduces ownership and profit share.
Your conclusion can be that if CPF wants to avoid risk, selling shares is safer, but if they want to keep control and can manage repayments, a loan may be better.
Always give a balanced judgement that fits the business situation.

That brings us to the end of today’s paper discussion. Great work everyone. Keep practising past papers using this same approach and you will do really well in your exams.

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