Tag: Business Studies

Happy Covers was started by Lucy in 2017. The business hires out chair covers and ribbons for weddings, school proms and other events.

In Lucy’s second year of trading the interest rate increased from 1.5% to 3%.

Identify ONE possible effect of this change in the interest rate on Lucy’s business?

Select ONE answer:

1. Lower sales
2. Greater competition from rivals
3. Increased variable costs
4. Reduced fixed costs

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

Which ONE of the following are fixed costs of a manufacturing business?

Select ONE answer:

1. Raw materials
2. Packaging for products
3. Parts and components
4. Interest on a bank loan

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

Which ONE of the following are fixed costs of a manufacturing business?

Select ONE answer:

1. Raw materials
2. Packaging for products
3. Parts and components
4. Rent on premises

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

Which ONE of the following are fixed costs of a manufacturing business?

Select ONE answer:

1. Raw materials
2. Packaging for products
3. Parts and components
4. Salaries of managers

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

Which ONE of the following might a sole trader pay on their profits?

Select ONE answer:

1. Corporation tax
2. National Insurance
3. Income tax
4. Import duty

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