Business L6th AQA Business

In 2013, after conducting market research, Tesco introduced more dining areas, coffee shops and even yoga classes to tempt customers back to its retail park stores. This might best be described as

• market segmentation

• market growth

• test marketing

• market orientation

Adidas, the world’s second biggest sportswear firm, reported that in the first three months of 2013, operating profits rose by 6% to 308m euro and the gross profit margin was 50.1%. This means that during the previous three months

• the sales volume was double the gross profit

• costs and expenses were 44.1% of sales

• operating profits were 290.56m euro

• the operating profit margin was 44.1% of gross profits

The Titanic Visitor Centre in Belfast, opened in March 2012. During its first year, it exceeded its initial target of 450,000 visitors and is on track to break-even. Which of the following would indicate that the Titanic Visitor Centre has reached break-even point?

• Demand equals supply

• Margin of safety is zero (0)

• Fixed costs are zero (0)

• Contribution is zero (0)

Robert Cairns, an operator of river cruises, has to raise £70,000 to meet working capital needs. One way of financing this is to

• arrange an overdraft

• increase customer credit terms

• increase stock levels

• pay back existing loans

B & A Scaffolding rented out crash barriers for the London 2012 Olympics. When the Olympics ended B & A Scaffolding analysed its performance. Its favourable profit variance was most likely due to

• other crash barrier suppliers reducing their prices

• fewer people attending than predicted

• a greater value of orders than predicted

• lower costs than predicted

Sam Carroll owns a hotel in Keswick, Cumbria. After a profitable 2011 he started to add more rooms to the hotel. Revenue for 2012 fell and the bank withdrew his overdraft facility. The most likely reason for the bank’s action would be that the hotel’s

• suppliers improved their credit terms

• profit for 2012 had been underestimated

• actual costs were below budget

• bank statements showed negative cash flow

In the year to 29 December 2011, the UK sandwich chain Pret A Manger experienced an increase in sales revenue of 15% to £377 million. Operating profits during the same period increased by 14% to £52.7 million. This shows that over this period:

• costs must have increased by 1%

• the operating profit margin was 14%

• the operating profit margin fell by 1%

• gross profits were £324.3 million

To raise money for the charity Children in Need, a group of business students at Landau Forte College in Derby, bought and resold Krispy Kreme doughnuts. Cost of sales was £80, average selling price was £1.20, fixed costs were £20 and 200 doughnuts were sold. What was the total contribution from the sales of the doughnuts?

• £240

• £220

• £160

• £140

Dell Computers uses a lean management system called ‘build to order’ in all of its computer manufacturing centres. Lean management is most likely to lead to:

• high stock levels

• long product development lead times

• greater efficiency

• excess capacity

The owners of Fever Tree, a mixer drinks company, compare budgeted overhead figures with actual figures. Which one of the following is most likely to be achieved as a result of this?

• Credit check prospective clients

• Identify variance issues

• Hold more stock than they need to

• Take on large new orders