Day: May 20, 2023

Alex Chocolate Goodies aims to support its suppliers and their communities by paying above market prices for cocoa beans.

Alex Chocolate Goodies’s aim is most likely to be influenced by which one of the following?

Select ONE answer:

1. Government legislation
2. Ageing population
3. Profit maximisation
4. Ethical consideration

Show your workings to arrive at your answer, and explain and justify your reasons:

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This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct – because even if the government intervene Alex Chocolate Goodies will still pay above the market price.
2. Not correct – because this potentially relates to their target market but not to the price they pay for the beans.
3. Not correct – paying a higher price will reduce the profit margin which is not a profit maximising action.
4. Correct – Definition of ethical consideration e.g. set of moral values that a business follows for the greater good. This means that it creates a better image for the business as consumer perceive the business is behaving responsibly to its suppliers. Therefore, giving Alex a competitive advantage.

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