WorksheetsPaper 2 MCQs - ALL
Total questions: 75
Worksheet time: 3hrs 30mins
(S2018) What is e-commerce?
A method used to ensure quality
A planning tool
A type of bank loan
A way to sell goods on the Internet
(S2018) David works in a biscuit factory and is responsible for procurement.
Which task is not likely to be part of David’s job role?
Buying sugar
Ordering biscuit packaging materials
Purchasing stationery
Selling biscuits
(S2018) A market stall sells bread for £1 a loaf and cookies for 60p each.
Yesterday 1000 loaves of bread and 2000 cookies were sold.
What was the market stall’s revenue?
£200
£1000
£1200
£2200
(S2018) Sabena works for a small business that makes computers. Her main task is to test every computer before it leaves the factory.
What key business function does Sabena perform?
After sales service
Quality control
Setting production levels
Supply chain management
(S2018) A manufacturer has decided to run a marketing campaign on national television in a month’s time.
As a result of this decision, which one of the following actions might also be necessary?
Finance should stop monitoring cash flow
Human resources should employ some temporary production workers
Operations management should reduce output
Purchasing should buy smaller quantities of raw materials
(S2018) Choosing how products will be delivered to customers is an example of a:
flow production issue
liquidity problem
logistical decision
purchasing concern
(S2018) What is Millican Garage’s closing balance for September?
-£2 130
£320
£2 130
£12 040
(S2018) A company operates in several countries.
This is an example of:
a multinational organisation
customer engagement
international branding
operations management
(S2018) Gross profit margin is:
a computerised method of production
a financial ratio
a pricing method
a variable cost
(S2018) Which one of the following businesses is most likely to use telesales?
A burger van
A petrol station
A school
An insurance company
(S2018) Consumer law requires shops to sell goods that are:
cheap
high quality
safe
unique
(S2018) A sole trader is short of cash to pay a supplier this month.
She should:
buy higher quality products
improve customer service
get an overdraft
repay her loan
(S2018) A business has a net profit margin of 8%.
Which one of the following must be true for this business?
The business cannot pay its short term debts
The business has made a loss
The business has revenues that are greater than its costs
The business is operating below its break even level
(S2018) An entrepreneur makes individual handmade prom dresses to order.
What method of production does the entrepreneur use?
Automated
Batch
Flow
Job
(S2018) The production costs for Jimco plc were £21.3 million in 2015 and £22.9 million in 2016.
What is the approximate increase between 2015 and 2016 in Jimco plc’s production costs?
0.9%
1.6%
7.0%
7.5%
(P2018) Which functional area is responsible for providing information about a firm’s revenue?
Finance
Logistics
Marketing
Production
(P2018) The concept of quality requires a business to:
charge low prices for its services
produce the best goods on the market
provide services to required standards
source its raw materials from ethical suppliers
(P2018) A company has made a net profit of £16 000.
Which of the following statements must be true?
The company has at least £16 000 in its bank account
The company will have no difficulty paying its bills
The company’s cash outflows were £16 000 more than its cash inflows
The company’s revenue exceeded its costs
(P2018) The length of a firm’s supply chain:
affects how quickly it can respond to changes in demand
depends on the production method used by the business
has no impact on the procurement function
is shown on an organisation chart
(P2018)
Company A
Company B
Company C
Company D
(P2018) A business has decided to update all of its computers and printers.
This decision will:
increase selling prices
reduce fixed costs
require financial resources
temporarily increase cash inflows
(P2018) Andrea specialises in painting portraits. She estimates that:
• variable costs for labour are £52 per portrait
• variable costs for materials are £23 per portrait
• fixed costs are £1000 per month
If Andrea paints and sells 50 portraits a year, total costs are estimated to be:
£1075 per year
£4750 per year
£12 075 per year
£15 750 per year
(P2018) A store that sells mobile phones wishes to improve the level of customer service it offers to those who come into the store.
Which one of the following will not improve the level of customer service the store offers?
Demonstrating to all staff how to be attentive, polite and helpful
Giving the sales assistants lists detailing the features of each phone
Offering a free phone case with every mobile phone purchased
Training the store manager to deal with technical queries
(P2018) Which of the following is an appropriate source of finance for a newly established company?
Overdraft
Retained profit
Sale of assets
Taking a partner
(P2018) At break-even a firm’s total revenue equals its:
fixed costs
gross profit
net profit
total costs
(P2018) Which one of the following is an example of how the finance function can support business activity?
Analysing primary market research results
Predicting revenues and costs
Reviewing the quality of the products made by the firm
Selecting staff for a business expansion
(P2018) This data is useful to Seiji when making business decisions because it shows that:
labour costs are increasing every year
profit levels are falling
the business is producing less than it used to
total costs are increasing
(P2018) The interdependent nature of business activity means that:
businesses need to merge to increase market share
entrepreneurs should favour high risk options
global trade is increasing
the functional areas in a business are linked
(P2018) A tractor manufacturer wishes to upgrade its robotics at a total cost of £4 million.
The cash inflow for each of the next five years is forecasted to be £1 million.
Assuming the forecasted figures are correct, the average rate of return for upgrading the robotics will be:
5%
25%
125%
20%
(P2018) Breakfast biscuits are becoming increasingly popular. HealthBisc Ltd predicts that in future years it will have difficulty producing enough breakfast biscuits to keep up with demand.
Which one of the following actions could help HealthBisc Ltd deal with this problem?
Automate the production process
Improve its after-sales service
Reduce its prices
Switch to job production
(2019) A customer comes into a travel agency to book a holiday to Australia. An assistant serves the customer. Which of the following is this an example of?
Face to face selling
International branding
Sales promotion
Telesales
(2019) Taj is a finance assistant. He works in a secondary school. Which one of the following tasks would be done by Taj?
Creating educational resources
Keeping the school website up to date
Producing reports on the school’s GCSE results
Providing financial data on school energy usage
(2019) Consumer law requires shops to sell goods which are:
environmentally friendly
of satisfactory quality
reasonably priced
unique
(2019) Choosing which supplier to use is a:
marketing decision
pricing decision
procurement decision
sales decision
(2019) Financial data for Pluck and Grow Ltd in 2018 is shown.
In 2018 Pluck and Grow Ltd made:
a loss of £52000
a loss of £42000
a profit of £16000
a profit of £26000
(2019) A supermarket decides to extend its opening hours.
The supermarket is likely to need:
a longer supply chain
fewer staff
lower quality products
reliable suppliers
(2019) Which of the following is a limitation of break-even analysis?
It cannot be used to estimate the profit a business is likely to make
It cannot factor in seasonal pricing and price discounts
It cannot show how much a business needs to sell to cover its costs
It cannot show the level of profit or loss at a range of outputs
(2019) The transport costs of Global Logistics United plc (GLU plc) for the last five years are shown.
The data shows that:
the company prefers to transport its goods by air
the company’s transport costs have fallen year on year
GLU plc spent more than £1.25 million on transport costs in 2018
GLU plc transports more goods by rail than by road
(2019) The finance department has forgotten to authorise the purchase of a large order of raw materials.
Which of the following is a likely consequence of this?
More marketing will be needed
Production may be delayed
Sales will increase
Storage costs will increase
(2019) An extract from Pasha’s Carpets’ cash flow forecast for August 2019 is shown.
Pasha’s Carpets’ net cash flow for August 2019 is expected to be:
−£3700
−£1500
£1500
£3700
(2019) A tinned-soup manufacturer is considering extending its product range to include fresh soups. Which one of the following is not likely to encourage the shareholders to vote for this extension to the product range?
The opportunity to combine ingredient costs and make higher profits
The opportunity to gain a reputation for producing healthy meals
The opportunity to have more customers than other soup manufacturers
The opportunity to increase the financial risks of the business
(2019) A manufacturer makes chocolate bars. All of the chocolate bars are passed through a machine to check for production mistakes before being boxed.
This is an example of:
product development
product recall
quality assurance
quality control
(2019) Exobike made a gross profit of £9996 from selling 42 exercise bikes at £350 each.
What was Exobike’s gross profit margin?
68%
147%
£4704
£14 700
Coconut Life uses e-commerce to sell its range of innovative coconut products.
Which of the following will not improve customer engagement?
Training staff on the benefit of coconuts
Only selling products that have been certified as organic
Sending carefully worded personalised emails to interested customers
Sending text messages to all previous customers about the benefits of coconut oil
Falling levels of consumer income have caused a car dealership to experience a significant reduction in retail sales.
Which one of the following actions should the car dealership take to help increase its sales during a period of falling consumer income?
Advertise less
Offer price reductions
Reduce customer engagement
Reduce its costs
(2021) The concept of ‘quality’ requires a business to:
produce goods that are better than the competition
produce goods that are reasonably priced
provide services that are fit for purpose
provide services that are value for money
(2021) Geoff, a sole trader, owns a second-hand book shop. Despite being well advertised and selling reasonably priced products, the shop has difficulty retaining customers.
Which of the following would help Geoff deal with this problem?
Advertise other second-hand book shops in the area
Close the shop early on weekdays in the school holidays
Improve customer service by being friendly and polite
Offer a free book to new customers who spend over £5
(2021) Shanco plc has managed to reduce its transport costs from £0.7 million in 2019 to £0.6 million in 2020.
What percentage reduction in transport costs has Shanco plc achieved?
6%
7%
14.3%
16.7%
(2021) An assistant serves a customer who has come into the post office to top-up their mobile phone credit.
This is an example of:
after-sales service
e-commerce
face to face selling
telesales
(2021) Hugh works in procurement at a factory that makes jeans.
Which of the following would not be part of Hugh’s job role?
Choosing a supplier of zips and buttons
Ordering printer paper and ink cartridges
Receiving delivery of threads and fabrics
Sewing the size label on to the waistband
(2021) Kim is a driving instructor. Kim charges £30 for a one-hour lesson. Her fixed costs are £14 000 per annum. The variable cost for a one-hour lesson is £6.
How many one-hour lessons will Kim need to give before making a profit?
389 lessons
467 lessons
584 lessons
2334 lessons
(2021) Which of the following would be an example of a quality assurance activity for a car manufacturer?
Driving every tenth car to test that the brakes are working correctly
Holding a meeting with production operatives on how to improve the manufacturing process
Increasing the amount of money that the operations function can spend
Visually inspecting two cars of each colour for defects in the paintwork
(2021) Which business function is responsible for supporting business planning by anticipating periods of cash shortages?
Finance
Logistics
Procurement
Sales
(2021) An extract from Pia’s Diner’s cash flow forecast for July is shown.
Pia’s Diner’s total inflow for July is expected to be:
£7000
£9300
£11 200
£11 600
(2021) International branding requires a business to:
advertise online
ignore religious differences
sell its goods in every country
take account of cultural differences
(2021) Which one of the following is a benefit of locating a tomato farm near to a ready supply of labour?
Ease of recruitment of tomato pickers
Personal contact with supermarket buyers
Sales of fresh tomatoes are likely to increase
The tomatoes will not need to be transported
(2021) Financial data for Tictal Ltd in 2020 is shown.
Tictal Ltd’s gross profit margin in 2020 was:
25%
45%
55%
75%
(2021) A business wishes to be known as an ethical employer.
Which of the following is not an example of ethical treatment of the workforce?
Allowing flexible working
Paying high wages
Providing good working conditions
Using robotics
(2021) An advertising agency wishes to upgrade its design software at a cost of £60 000. The net cash flow generated by the software for each of the next two years is forecast to be £60 000.
Assuming the forecasted figures are correct, the average rate of return for this upgrade will be:
33%
50%
67%
100%
(2021) To support Padre Stores Ltd’s decision making, quarterly revenue data in 2020 has been calculated for each of the company’s three stores.
The data shows that:
average revenue per store in Q2: Apr–Jun was
£39 500
store A had an average revenue of £50 500 per quarter
store C took more revenue in 2020 than either of the other two stores
total revenue in Q1: Jan–Mar was better than in any other quarter
(2020) Which of the following tasks is not a finance function?
Advertising price reductions
Applying for a bank loan
Calculating break-even
Measuring profit and loss
(2020) Which of the following issues is climate change an example of?
A financial issue
A quality control issue
An economic issue
An environmental issue
(2020) A manufacturer is experiencing a range of problems.
Which of the following problems would be classed as a ‘liquidity problem’?
A breakdown on the production line
Being short of funds to pay suppliers
Experiencing high levels of wastage during the production process
Having insufficient financial information to make business decisions
(2020) A company’s total costs are too high. The finance manager advises that this is being caused by increasing wage costs as the company expands. Which one of the following actions would provide a long term solution to this problem?
Applying for an overdraft
Automating the production process
Employing a finance assistant
Switching to job production
(2020) A business will make a profit if it:
ends the year with a positive bank balance
exceeds its break-even quantity
has costs that are greater than its revenues
pays off all of its debts
(2020) Which of the following is a short-term source of finance suitable for a new business?
Retained profit
Sale of business assets
Share issue
Trade Credit
(2020) A company’s total costs in 2019 were £9 million. The company’s labour costs were 40% of the company’s total costs. The company’s labour costs in 2019 were:
£3.6 million
£5.4 million
£12.6 million
£14.4 million
(2020) Variable costs:
are not affected by changes in output
fall as output rises
increase as output rises
remain constant over time
(2020) A customer has ordered an electric shower from a plumbing firm. By law, the plumbing firm must:
charge a lower price than other plumbers
fit the shower without turning the water off
supply a shower that meets current safety standards
use an environmentally friendly supplier
(2020) Following recent financial success, a business has decided to double the size of its workforce. This decision will significantly increase the workload of the:
finance function because new recruits need to be trained
human resources function because applicants need to be interviewed
marketing function because person specifications need to be produced
purchasing function because contracts of employment need to be issued
(2020) A furniture maker intends to purchase a new wood cutting machine. The expected cost and incomes generated by the machine for the next three years are shown in the table.
The expected average rate of return for this purchase is:
£1000
£3000
16.67%
33.33%
(2020) An extract from Pete’s Pet Shop’s cash flow forecast for July is shown.
What is Pete’s Pet Shop’s estimated total cash outflow for July?
£3900
£6295
£7505
£9295
(2020) The concept of ‘quality’ refers to making products:
by hand
of a satisfactory standard
that are better than the leading brand
to the highest possible specification
(2020) A business finds it relatively easy to gain customers but has great difficulty retaining these customers.
Which aspect of the business is most likely to need improving?
After-sales service
E-commerce
Marketing
Procurement
(2020) Finance performance data for Pico Ltd over the last three years is shown in the table.
According to the table, which of the following must be true?
Pico Ltd has improved its market share
Pico Ltd has decreased its prices year on year
Pico Ltd has made a profit in all three years
Pico Ltd has not paid its variable costs
