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adadasda

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213 views4 pages

0450 m17 in 22

adadasda

Uploaded by

Mohammed MaGdy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Cambridge International Examinations


Cambridge International General Certificate of Secondary Education

BUSINESS STUDIES 0450/22


Paper 2 February/March 2017
INSERT
1 hour 30 minutes
*0742139033-I*

READ THESE INSTRUCTIONS FIRST

This Insert contains the case study material.


Anything the candidate writes on this Insert will not be marked.

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

This document consists of 3 printed pages and 1 blank page.

DC (CW/SG) 134130/3
UCLES 2017 [Turn over
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2

Bags and Belts (BB)

BB is a small private limited company. It manufactures leather handbags and belts. It only uses the best
quality leather. BB sells the bags and belts using its own brand name to large retailers. BB currently
does not use the Internet in its business operations.

The leather used by BB has always been purchased from the same local business since BB was set
up. This supplier guarantees high quality leather and has always delivered on time.

BB was started 35 years ago and is now managed by Abdullah, the grandson of the original owner.
The other directors are all members of the family. BB employs workers from the local community to
manufacture the handbags and belts.

BB uses batch production. The workers who make the handbags and belts are skilled, but wage costs
are kept low by employing young workers to pack the products. The production process has waste
materials and these are put into the nearby river. However, local people complain that it affects their
drinking water.

The directors want to increase profit. They are thinking of either increasing prices or making some
of the handbags out of a material that looks like leather but is much cheaper to buy. The Marketing
Director thinks the demand for their handbags is price inelastic as many consumers are loyal to the
BB brand.

Appendix 1

Organisation chart for BB

Abdullah (Managing Director)

Marketing Director Operations Director Human Resources Director Finance Director

Sales Purchasing Factory manager Administration officer Financial accountant


manager manager [1]

Sales staff Assistant Production Assistant


[3] [1] workers [1]
[100]

UCLES 2017 0450/22/INSERT/F/M/17


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3

Appendix 2

From: Abdullah
To: BB directors

I want BB to expand and I am considering the following two options.

Option A:
Sell BB branded handbags to wholesalers. This will allow BB to sell its handbags all over the country.
We will need to spend a lot of money on advertising in magazines aimed at people on high incomes.
The economy has been growing rapidly and many people now have high incomes.

Option B:
To accept a contract to manufacture luxury handbags for a major global business. This global business
will then sell these handbags using its own channels of distribution across the world. The global
business has a recognised luxury brand and its handbags sell at very high prices in exclusive shops
all over the world. All the workers will need to be skilled and fully trained as the highest quality will
be expected. New equipment costing $20 000 will need to be purchased. BB will still make some BB
branded handbags.

We must meet to discuss which option you think we should choose.

Appendix 3

Summary of BB balance sheet ($000)

2015 2016

Non-current assets 100 120

Current assets:
Inventories 10 40
Cash 10 10
Trade receivables 10 40

Current liabilities:
Trade payables 40 50

Non-current liabilities:
Long-term bank loan 80 80

UCLES 2017 0450/22/INSERT/F/M/17


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4

BLANK PAGE

Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every
reasonable effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the
publisher will be pleased to make amends at the earliest possible opportunity.

To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge International
Examinations Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download at www.cie.org.uk after
the live examination series.

Cambridge International Examinations is part of the Cambridge Assessment Group. Cambridge Assessment is the brand name of University of Cambridge Local
Examinations Syndicate (UCLES), which is itself a department of the University of Cambridge.

UCLES 2017 0450/22/INSERT/F/M/17

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