Category: Business Studies

In March 2022, Electromac Group, a multinational engineering business, reported the following annual results.

Revenue £64 826M
Cost of sales £60 737M
Gross profit £4 089M
Other operating expenses £546M

What was the profit in relation to revenue %?

Select ONE answer:

1. 5.47%
2. £3 543m
3. 6.31%
4. £64 280m

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

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

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

The answer is 1

1. Correct – formula for margin is: profit for the year/revenue x 100. Profit for year is £3 543 or 4 089-546. Therefore £3 543m / £64 826m x 100 = 5.47%
2. Not correct
3. Not correct
4. Not correct

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The Staffordshire Beer Company produces its beer using a closely guarded secret recipe.

This is likely to give The Staffordshire Beer Company a….

Select ONE answer:

1. competitive advantage
2. market orientation
3. market map
4. test market

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

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

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

The answer is 1

1. Correct – Competitive advantage is any positive feature that distinguishes a company from its competitors. In this case, the competitive advantage comes from Staffordshire’s secret recipe that no other drinks company can use. Customers who like the taste of the Beer because of its secret recipe can only buy from Staffordshire Beer which then generates consumer loyalty, which is a source of competitive advantage.
2. Not correct – the secret recipe is an aspect of product orientation not market orientation.
3. Not correct – market mapping places the Beer in relation to its competitors and is nothing to do with the secret recipe.
4. Not correct – test marketing would involve trialing different recipes and there is only one for Staffordshire Beer Company’s Beer.

This work is licensed under a Creative Commons Attribution 4.0 International License.

Lucy started and owns “Big Time Art Student”, a small business that sells 100% woollen clothes spun from wool from local Dorset sheep.

Which ONE of the following is MOST LIKELY to be the structure of Lucy’s business?

Select ONE answer:

1. Partnership
2. Co-operative
3. Sole trader
4. Public limited company

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

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

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

The answer is 3

1. Not correct – a partnership is owned by two or more people and “Big Time Art Student”, was set up and owned by Lucy.
2. Not correct – with any co-operative the ownership is shared between many people. Lucy does not share ownership with any other person.
3. Correct – A sole trader is a business set up, owned and run by one person with unlimited liability. Most small businesses start as sole traders because of the simplicity of the structure/it is easy to set up. As Lucy has set up and owns this business herself, meaning she has no partners or shareholders, she can make all of the business decisions and keep the profits herself.
4. Not correct – Public Limited Companies have shares that are traded on the stock exchange and multiple owners are called shareholders which own the business. As a sole trader, this option is not open to Lucy.

This work is licensed under a Creative Commons Attribution 4.0 International License.