Tag: A-Level

Alex Sportswear produce a range of footwear for men, women, children, different sports and other leisure activities.

The most likely reason for Alex to use market segmentation is to …. ?

Select ONE answer:

1. more effectively target its market
2. reduce the need for market research
3. avoid the need to advertise
4. reduce the range of products being offered

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 – Market segmentation is the process of dividing a market up into different groups of customers. In a segmented market, customers are more likely to buy products that are made to match their needs, thus increasing Alex’s sales. This increases profitability and reduces the threat of direct competition.
2. Not correct – because Alex will still need to carry out market research into what the different market segments would require
3. Not correct – because Alex will still need to advertise in order to increase awareness of its products to different segments
4. Not correct – because market segmentation increases the range of products as the needs of different segments are identified and provided for

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Alex Market Research carries out product trials on behalf of some of the biggest retail brands in the UK seeing what new products works well with retail customers in Staffordshire.

Businesses carry out product trials for new products to…?

Select ONE answer:

1. guarantee sales
2. reduce their margin of safety
3. assess the likely levels of demand
4. gather secondary research

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 – because product trials do not guarantee sales as they do not take other factors into consideration e.g. competition
2. Not correct – because product trials should increase the margin of safety not reduce it because consumers are more likely to purchase a product if they have already tried it as a free sample
3. Correct – Product trials is launching a product on a limited scale to measure initial reactions. Feedback from customers can be used to adapt or modify the product. This will increase the likelihood of successful sales when the product is launched on a national basis.
4. Not correct – because products trials are a method of primary research because they collect first hand information

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Lucy is the founder of Guinea Pig Love, a very successful global brand. She has won many awards including Staffordshire Young Entrepreneur of the Year in 2021.

Which one of the following is least likely to be a characteristic of a successful entrepreneur?

Select ONE answer:

1. Self-confident
2. Risk-taker
3. Resilient
4. Indecisive

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 4

1. Not correct – because an entrepreneur has to be self-confident and believe in their ideas and decision making, particularly when faced with difficult choices/decisions.
2. Not correct – because entrepreneurs do take risks which are balanced against rewards.
3. Not correct – because resilience means not giving up, which is crucial for a successful entrepreneur as businesses often struggle/fail, especially in the first year.
4. Correct – what is an entrepreneur e.g. someone who combines the factors of production in order to create a business/willingness to take risks involved in running a business. Many successful entrepreneurs have to be able to make many quick decisions for the survival of their business. If decisions are not made quickly vital opportunities would be lost thereby risking the success of the business.

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At the Stafford Vintage Trade Fair, held on 1 April 2021, Lucy managed to break-even by selling 40 items of costume jewellery she had made
that week.

Assuming fixed costs of £60, and an average selling price of £9, which one of the following represents Lucy’s variable cost per unit?

Select ONE answer:

1. £0.66
2. £1.50
3. £6.66
4. £7.50

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 4

1. Not correct
2. Not correct
3. Not correct
4. Correct -Break-even = Fixed cost (FC) / Selling Price-Average Variable costs, OR Contribution = FC/BE, OR average variable costs are total variable costs divided by output OR variable costs = sales revenue minus FC divided by breakeven OR variable costs are costs which vary with output OR Break-even is the output level where total costs equals total revenue. ==> 40 = £60/£9 – £7.50

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Lucy went on a business trip to France and came back with two restaurant receipts – one for €25.10 & one for €11.00.

If the exchange rate for the month end of December 2021 was £1 = €1.23, then calculate the combined price in sterling of these two receipts that need to be put in the month-end accounts.

Select ONE answer:

1. £44.40
2. £36.10
3. £29.35
4. £20.40

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
2. Not correct
3. Correct – The exchange rate is the price of one currency expressed in terms of another. The total of the spend is €36.10 divided by 1.23 = £29.35
4. Not correct

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