SAMPLE PAPER 02

Class 12 - Business Studies

Time Allowed: 3 hours
Maximum Marks: 80

General Instructions:

1. This question paper contains 34 questions.

2. Marks are indicated against each question.

3. Answers should be brief and to the point.

4. Answers to the questions carrying 3 marks may be from 50 to 75 words.

5. Answers to the questions carrying 4 marks may be about 150 words.

6. Answers to the questions carrying 6 marks may be about 200 words.

7. Attempt all parts of the questions together.

1. Ravi is the Managing Director of Ionn Ltd., manufacturing different varieties of cheese. He has an efficient [1]
team working under him consisting of Lalit at, the Production manager, Varun - the Marketing manager and
Abhay - the Finance manager. They understand and interpret the policies made by Ravi, ensure that their
departments have adequate manpower, assign them the necessary duties and motivate them to achieve the
desired objectives. Identify the level of management they are working.

a) Top Level Management b) Operational Management

c) All of these d) Middle Level Management

2. Tomato Ltd., a food delivery service app has recently faced criticism for the tampering of their product, by their [1]
boys. Tomato Ltd. decide to put a hologram seal on the food packets in order to protect the contents from
spoilage, leakage, pilferage, damage, along with a tag with a safety warning for the consumers to check the seal.
Which concept of marketing discussed above is performing the important function of communicating with the
potential buyer and promoting the sale?

a) Branding b) Labelling

c) Packaging d) Product designing and development

3. Which of the following is not true about planning? [1]

a) Planning is a mental exercise b) Planning is necessary

c) Planning reduces creativity d) None of these

4. What is included in financial planning? [1]
A. Preparation of a financial blueprint of an organization's future operations.
B. Ensuring enough funds are available at the right time.
C. To increase shareholders wealth

a) All of these b) Only A

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 c) Only B d) Only C
5. The consumer organisations collect the samples of the products to ________. [1]

a) Sell them b) Check them

c) Get bribe from the sellers d) Distribute them among the poor
6. The term used to indicate the difference between standard performance and actual performance is called [1]
________.

a) Performance Standards b) Deviations

c) Key result areas d) None of these

7. OTCEI was started on the lines of: [1]

a) NSE b) NYSE

c) NASAQ d) NASDAQ
8. Rakesh works as a software engineer in an IT company. He provided the reference of close friend Rohan to the [1]
Human Resource Department for the post of Senior Business Development Manager. Rohan was duly selected
for the concerned post by the company. Identify the source of recruitment being used by the company.

a) Advertising b) Direct recruitment

c) Recommendation of employees d) Placement agencies and management

consultants
9. Unfavourable financial leverage leads to: [1]

a) EPS is not affected b) Increase in EPS

c) Increase in tax d) Decrease in EPS

10. Mohan, a leading director of a big movie production house always gives opportunities to his subordinates to [1]
utilise their talent. His subordinate Surbhi used these opportunities to showcase her talent and developed her
skills to perform complex tasks. Eventually Surbhi started directing films on her own and was promoted as an
Assistant Director, with a huge increase in salary. The point of importance of delegation reflected in the above
case is:

a) Better coordination b) Basis of management hierarchy

c) Effective management d) Employee development

11. Tractors Pvt. Ltd. producing 2,00,000 trucks and generating revenue of ₹ 2,000 crores annually, has recently [1]
acquired the world's second largest truck manufacturing company. After this acquisition, Tractors Pvt. Ltd. will
become the world's largest truck manufacturer. For financing the acquisition, the company had to arrange about
₹ 1,00,000 crores through debt and equity ________ function is being performed by the company for arranging
the funds through debt and equity.

a) Financing b) All of these

c) Dividend d) Investment
12. Sensex is dependent on ________ companies. [1]

a) 100 b) 50

c) 500 d) 30

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13. Match the principle of management in Column I with their respective explanation in Column II: [1]

(a) Scalar chain (i) When no division of the company has a separate plan of action.

(b) Subordination of (ii) When a manager awards contract for supply of raw material to a particular party,
individual interest to which happens to be owned by his relative ignoring other parties, who can supply
general interest the same at a cheaper rate.

(iii) When a subordinate habitually contacts higher authorities in the company by

(c) Unity of direction
passing his/her immediate superior.

(iv) When the manager grants one-month medical leave to a supervisor with pay and
(d) Equity
only one-week medical leave to accountant.

a) (a) - (iii), (b) - (ii), (c) - (i), (d) - (iv) b) (a) - (ii), (b) - (i), (c) - (iii), (d) - (iv)

c) (a) - (i), (b) - (ii), (c) - (iii), (d) - (iv) d) (a) - (iii), (b) - (i), (c) - (ii), (d) - (iv)
14. Which one of the following is a standing plan? [1]

a) Project b) Programme

c) Budget d) Policy
15. Short-term Investment Decision is also known as ________. [1]

a) Dividend Decision b) None of these

c) Working capital d) Capital Budgeting

16. NSE commenced futures trading in the year: [1]

a) 2002 b) 2000

c) 2001 d) 1999
17. Which level of management formulates overall organizational goals and strategies for their achievement? [1]

a) Top-level b) Supervisory level

c) Operational level d) Middle level

18. Planning cannot foresee everything and thus, there may be obstacles to effective planning. It becomes [1]
difficult to accurately assess future trends in the environment if economic policies are modified or political
conditions in the country are not stable or there is a natural calamity. Identify the limitation of planning
highlighted above.

a) Planning leads to rigidity b) Planning reduces creativity

c) Planning does not guarantee success d) Planning may not work in a dynamic
environment
19. Acquiring a new fixed asset is an example of: [1]

a) working capital decision b) Capital budgeting decisions

c) financing decision d) Dividend decision

20. Statement I: The first step in the controlling process is Measurement of Actual Performance.
[1]
Statement II: Improving goodwill and motivation level of employees are examples of qualitative standards.

a) Statement II is correct and Statement I is not b) Both the Statements I and II are correct.

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 correct.

c) Statement I is correct and Statement II is not d) Both the Statements I and II are not correct.
correct.
21. Describe in brief any five functions of Top Level Management in an organization. [3]
22. Explain any three assumptions of Maslow’s Need Hierarchy Theory. [3]
23. Hamam Singh owns fruit orchids near Bhowali near Nainital where finest quality of apples, peaches, [3]
strawberries, and plums are grown. He plans to start 15 juice kiosk in different localities in Nainital in
partnership with his brother-in-law Gurpal Singh. He is planning to take place for shops on rent besides he needs
money for the purchase of other ingredients, machines for making the juice, and the salaries of the employee(s)
making the juice etc.

Identify and explain any two factors affecting fixed capital requirements of Hamam Singh's new business
proposal being discussed in the above paragraph by quoting lines from the paragraph.
OR
What is meant by financial management? State any two financial decisions taken by a financial manager.
24. Himanshu purchased a new car from ‘Galaxy Motors’ for Rs.25 lakhs. He was offered free insurance for the first [3]
year and three free servicing to be availed after the car had covered 5,000 km, 10,000 km and 15,000 km
respectively. When Himanshu took the car for the first free servicing, he was told that the car was not new and
first service had already been availed on this car. He felt cheated and filled a complaint in the State Commission.
Being not satisfied with the decision of the State Commission, after two months he decided to file and appeal
against it.

Can Himanshu appeal against the decision of the State Commission? Give reason in support of your answer.
OR
Who is a consumer as per CPA?
25. Explain Budget as a plan? [4]
OR
Why are the planning premises required in the planning?
26. Mr Arfaaz had been heading the production department of Write well Products Ltd., a firm manufacturing [4]
stationary items. The firm secured an export order that had to be completed on a priority basis and production
targets were defined for all the employees. One of the workers, Mr Bhanu Prasad, fell short of his daily
production target by 10 units for two days consecutively. Mr Arfaaz approached Ms Vasundhara, the CEO of the
Company, to file a complaint against Mr Bhanu Prasad and requested her to terminate his services. Explain the
principle of management control that Ms Vasundhara should consider while making her decision. (Hint:
Management by exception).
OR
Vishesh works as an interior designer. He gets a contract to redesign a play school. He employs three painters on the
site assuming that an average painter will be able to paint 10 desks in a day. At the end of the first day of their work,
Vishesh finds that the painter A, painter B, and painter C have painted 12, 14 and 15 desks respectively. On
comparing the actual performance with the planned performance, he realises that the standard set by him is too low.
Consequently, he decides to review and revise the standard and raise it.

In the context of the above case:

a. Identify the function of management being performed by Vishesh.

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 b. "Planning and controlling are both backwards-looking as well as forward-looking functions." Explain the
statement with reference to the above paragraph.
27. Explain how Principles of Management help in thoughtful decision-making. [4]
28. It takes place throughout the life of the organisation irrespective of people occupying managerial positions. [4]
Mention the characteristic of directing highlighted here and also explain two more characteristics.
29. What is meant by a primary market? Briefly explain the concept of an initial public offer. [4]
30. Prakhar purchased an ISI mark electric iron from 'Bharat Electricals'. While using he found that it was not [4]
working properly. He approached the seller and complained for the same. The seller satisfies Prakhar by saying
that he will ask the manufacturer to replace this iron.The manufacturer refused to replace and Bharat Electricals
decided to file a complaint in the consumer court. Can 'Bharat Electricals' do this? Why? Also explain 'who is a
consumer' as per Consumer Protection Act, 1986.
31. Prateek has started an advertising agency in Gurgaon. One of the pages on his company's website contains the [6]
following information, "Welcome to all the visitors of this page who are looking for an opportunity to make a
career in the field of advertising. The openings are available in the company at various levels, so don't miss the
chance." This page includes a link to provide further details about the vacancies available in terms of the desired
qualifications, experience, personality characteristics and so on. Through a continuous assessment of the number
and types of human resources necessary for the performance of various jobs and accomplishment of
organizational objectives and in relation to the number and type available, he gets the information on this page
updated.

In the context of the above case:

a. Identify and explain the steps in the staffing process being carried out by Prateek by quoting lines from the
paragraph.
b. Name the concept that relates to the details about the vacancies available in terms of the desired
qualifications, experience, personality characteristics and so on.
OR
Describe briefly the steps involved in the process of staffing.
32. 'Konark Ltd/ is an electronics goods manufacturing enterprise situated in Shivpuri, Madhya Pradesh. It is earning [6]
a very low revenue in comparison to a competing electronic good manufacturing enterprise, 'Nova Ltd.' situated
in Mumbai. Both Konark's and Nova's operations are affected directly by the investors, customers, competitors,
and suppliers, which are unique to their respective locations. In addition to this, individual firms of this field are
affected indirectly by factors like the money supply in the economy, the composition of the families, the
technological changes, etc.
a. Identify and state the feature of the concept discussed in the above paragraph.
b. Also, state any four points of importance of this concept.
OR
India’s craft heritage is surviving because of its customs and traditions. Craft products made by craftsmen of
Rajasthan, Gujarat, Assam, etc. are not only used in the country but are also exported to the USA, Germany, UK,
France and other countries of the world. The volume of exports of these products gives India an advantage in the
balance of payments and the much needed foreign exchange. The Prime Minister desires that the handicraft industry
should be expanded by linking it with technology. The focus should be on changing the manufacturing process,
ensuring durability and adopting innovations.

Quoting the lines from the above paragraph, explain any four dimensions of the business environment.

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33. E-Solutions Ltd. started its operations in the year 2000. At the time of its inception, the company had only ten [6]
employees with two departments, a Production Department, and an Administration department. The products
supplied and the services provided by the company started gaining popularity over the years. The management
had faith in the abilities of the employees and thus they allowed them freedom of action. The management
recognized that the decision-makers at different levels of the organization need to be given more autonomy.
They took a policy decision that there will be less control of superiors over subordinates. This increased the role
of the subordinates in the organization and now they were in a position to take numerous as well as important
decisions. As a result, its business has diversified into many areas. Presently, it has its operations throughout the
country with seven branches overseas. Its organizational structure has now changed into a divisional structure
and ten thousand people are working with the company.
a. Identify the concept of management which helped the company to diversify into many areas and branches
abroad.
b. Explain five points of importance of the concept identified in (a) above.
34. Radhika was a student of Business Studies of class XII. Her father was a farmer who grew different varieties of [6]
rice and was well-versed about various aspects of rice cultivation. He was also selected by the government for a
pilot-project on rice cultivation.

As a project-work in Business Studies, she decided to study the feasibility of marketing good quality rice at a
reasonable price. Her father suggested her to use the internet to gather customers’ views and opinions. She found
that there was a huge demand for packaged organic rice.

She knew that there were no pre-determined specifications in case of rice because of which it would be difficult
to achieve uniformity in the output. To differentiate the product from its competitors, she gave it the name of
‘Malabari Organic Rice’ and classified it into three different varieties namely—popular, classic and supreme,
based on the quality. She felt that these names would help her in product differentiation.

Explain the three functions of marketing, with reference to the above paragraph.

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