Tag: AQA

In May December 2021, The New Little Fawn announced it would recruit 30 new members of staff.

This will widen the span of control of its existing managers.

What would be one benefit to The New Little Fawn of a wider span of control?

Select ONE answer:

1. It can provide more management positions
2. Managers will have more time to supervise each employee
3. The organisational structure will remain the same
4. It will be easier to control a greater number of employees

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 there will be fewer management positions as no additional managers are being employed.
2. Not correct – because an increased span of control means managers have less time with each employee.
3. Correct – Definition of span of control e.g. the number of employees under a manager’s direct control or definition of organisational structure e.g. the number of layers in the business or definition of wider span of control e.g. managers will have more employees to control/supervise. Although more employees have been recruited there has been no change to the number of layers within the organisational structure. This will increase output without increasing layers/overheads
4. Not correct – because it will be more difficult to control the increased number of employees because the number of managers has not increased.

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Bubbly Drinks manufactures a wide range of fizzy drinks that are sold around Staffordshire.

Its most popular drink is still the original Bitter Lemonade, which is a cash cow.

A cash cow is important to Bubbly Drinks because it?

Select ONE answer:

1. generates a significant amount of revenue
2. is new on the market
3. has a high market share and a high rate of growth
4. generates all of Bubbly Drink’s profits

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 – Cash cows are mature products with a high but stable market share/low growth. Cash cows are important because they can be ‘milked’ for cash/revenue. Bubbly Drinks bring out new flavours of fizzy drinks every year and their development is funded by the profits from the cash cow.
2. Not correct – products which are new on the market are called question marks/problem child and it is uncertain as to how successful they will be.
3. Not correct – cash cows do not have a high rate of growth as their growth tends to be slow and steady over time.
4. Not correct – cash cows do not generate all the profits for a business and star products such as Ginger Beer/other Bubbly Drinks drinks can also generate a significant amount of profit.

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