ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

JUNE 2011 PAPER 1

1a) STATE ANY TWO FACTORS OF PRODUCTION [2]

• Land.

• Labour.

• Capital.

• Entrepreneurship

b) WHAT FACTORS SHOULD BE CONSIDERED BY AN ENTREPRENEUR WHEN

CHOOSING THE LOCATION OF HIS BUSINESS? [3]

• Proximity to raw materials.

• Proximity to market.

• Government policies.

2a) DISTINGUISH BETWEEN DIRECT AND COMMERCIAL SERVICES [4]

• Direct services are those provided personally to the consumers .e.g. teaching
and nursing WHILEST commercial services are those provided indirectly
through trade and commerce .e.eg. banking.

b) HOW CAN THE GOVERNMENT ASSIST SMALL BUSINESSESS IN YOUR COUNTRY

[4]

• Provide already built production shells.

• Provide grants and loans through SEDCO.

• Offer tax holidays to small firms.

• Provide training to small firms through workshops.

• Protect small firms through imposing trade protectionism.

3) TO WHAT EXTENT IS JOB EVALUATION USEFULLTO AN ORGANISATION [4]

ADVANTAGES

• It help to determining salary scales in an organization.

• It also help to create job description which is used in recruitment.

DIADVANTAGES

• The process is subjective hence results can be biased.

• It can demotivate workers with lower ranks and by the subjective process.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.

j.squard
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

4)WHAT IS THE DIFFERENCE BETWEEN SPAN OF CONTROL AND CHAIN OF

COMMAND?[2]

SPAN OF CONTROL

• Refers to number of subordinates who report directly to a superior.

CHAIN OF COMMAND

• Refers to flow of authority from top management down to lower level

managers.

b) BRIEFLY EXPLAIN WHY SOME PREFER TO WORK FOR A BUSINESS WITH WIDE
SPAN OF CONTROL [4]

• There is chance to be delegated staff in a business with wide span of control

which motivate staff.

• Information flows fast which promote fast decision making and avoid isolation
of workers from top management.

5a) STATE ANY TWO COMMUNICATION METHODS [2]

• Oral communication.

• Written communication.

• Visual communication.

• Electronic communication.

b) EXPLAIN HOW McGREGOR’S THEORY X AND THEORY Y MIGHT INFLUENCE THE

LEADERSHIP STYLE OF MANAGERS [4]

THEORY X

*Managers who assumed that they are working with theory X workers will;

• Use autocratic leadership style.

• Centralization.

• Seldom delegate.

THEORY Y

*Managers who assumed that they are working with theory Y workers will;

• Use democratic leadership style.

• Decentralization.

• Delegate tasks.

• Two way communication.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

6a) WHAT IS PRICE [2]

• Is an exchange value of goods and services.

b) EXPLAIN THE IMPORTANCE OF PRICE IN BUSINESS [4]

• Price attract or retain customers.

• Price generate income or revenue for the business.

7a) DISTINGUISH BETWEEN MARKET SHARE AND MARKET SIZE [2]

MARKET SHARE

• Refers to the percentage of market size served by a specific business for a given
period.

MARKET SIZE

• Refers to the total number of potential customers in a given industry for a given
period of time.

b) THE FOLLOWING INFORMATION RELATES TOA FIRM IN A SHOE

MANUFACTURING INDUSTRY.

2004 2005
Units Value$ Units Value $
Total industry sales 36 000 48 000
Firm’s sales 3 600 5 000
Total industry sales 5 000 6 500
Firm’s total sales 500 600

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

• CALCULATE THE GROWTH RATE OF THE TOTAL INDUSTRY SALES

OVER THE TWO YEARS [4]

Growth:

Rate of total industry sales = 6 500 – 5 000 X 100

5 000 1

= 1 500 X 100
5 000 1

= 30%

ii) THIS FIRM’S MARKET SHARE DROPPED FROM 10% TO 9.23% OVER THE YEARS.
EXPLAIN THE MEANING OF THIS DECREASE [2]

• Firm’s customers were more in 2004 than in 2005, maybe due to competition
in 2005 the firms market share dropped by 0.77%.

8) DEFINE THE TERM PRODUCTIVITY [2]

• It refers to the output per input of labor, raw materials or machine employed.

9) EXPLAIN WHY SHOULD SHAREHOLDERS MIGHT BE CONCERNED ABOUT

DECISION TO BORROW MORE CAPITAL IF PROFITS OF THE COMPANY HAVE
CONTINUED TO FALL OVER SEVERAL YEARS [4]

• Shareholders would be trying to avoid the dilution of control and ownership

especially what happen when shares are issued.

• The expense of interest on loan can be useful on business as it will the amount
payable out to government as tax.

• Low profits deter investors so the only way the business can get finance is to
borrow.

10) EXPLAIN THE PROBLEMS THAT MAY ARISE FROM HAVING LOW LEVEL OF
WORKING CAPITAL IN A BUSINESS [4]

#Failure to build stock

• Lack of working capital lead to business failing to buy stock which affect
business.

#Risk of insolvency & Liquidity

• Lack of working capital lead to insolvency and risk of liquidation.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

11a) NAME ANY TWO TYPES OF RATIOS THAT ARE USED IN BUSINESSES [2]

• Liquidity ratios.

• Profitability ratios.

• Gearing ratios.

• Investment ratios.

• Efficiency ratios.

b) ANALYSIS OF A SMALL FIRM’S ACCOUNT DISCLOSES AN ACID TEST RATIO OF

0;4 AND A CURRENT RATIO OF 1;1. COMMENT ON THE FINANCIAL POSITION OF
THIS FIRM [4]

• The current ratio shows that the business is able to pay its debts/obligations
but left with no cash to use as working capital hence business can face
problems of failure to build stock.

• Acid test shows that the business is not able to pay its obligation without stock
hence will face liquidity problems.

12) COMMENT ON THE USEFULNESS OF THE BLENDING TECHNIQUE AS A

DECISION MAKING TOOL [6]

ADVANTAGES

• It is useful when firms are deciding on the best use of available resources.

• Can be used by managers to allocate resources between different products so

that costs are minimized.

• Linear programming can be faster way of getting results and making decisions
if computer models are used.

DISADVANTAGES

• Linear programming assumes that resources can be switched between two

products at a constant rate of productivity.

• It also ignores other non-qualitative factors which affects product

performance .e.g. competition.

• Linear programming assumes and only allows two products to be considered.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

NOVEMBER 2011 PAPER 1

1a) STATE TWO LEGAL CONSTRAINTS THAT CAN AFFECT THE BUSINESS [3]

• Healthy and safety needs.

• Consumer laws.

• Employment laws.

b) OUTLINE THE WAYS IN WHICH THE GOVERNMENT MIGHT PROVIDE EMPLOYEE

PROTECTION IN YOUR COUNTRY [4]

• Enacting healthy and safety laws.

• Enacting anti-discrimination laws at work.

• Use of trade unions formalities.

• Use of minimum wage rates.

2)HOW DO THE FOLLOWING NON-FINANCIAL FACTORS MOTIVATE WORKERS?

i) TEAM WORK

• There is sharing ideas and imparting of skills.

• Promote informal group communication.

ii) TRAINING

• It increase promotional opportunities.

• It is important for self-development which improves efficiency and motivation.

3a) EXPLAIN THE IMPORTANCE OF COMMUNICATION IN AN ORGANISATION [4]

• It increase motivation of staff.

• Helps in the attainment of organization objectives.

• It also results in co-ordination and integration.

• It reduces conflicts, wastages and accidents.

b) SHOW ADVANTAGES AND DISADVANTAGES OF ORAL COMMUNICATION [4]

ADVANTAGES

• It is direct and easy to understand.

• It can be varied to suit different of the receiver.

DISADVANTAGES

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

• It is affected by noise.

• There are no permanent accurate records.

• Can be quickly forgotten.

4a) WHAT ARE MAIN CAUSES OF HIGH LABOUR TURN-OVER? [4]

• Poor working conditions.

• Hostile relationship with superiors and peers.

• Lack of job security.

• Lack of promotional aspects and status.

b) HOW MIGHT MANAGEMENT REDUCE HIGH LABOUR TURN-OVER? [4]

• Improve the working conditions.

• Improving communication and information sharing.

• Demonstrate that promotional prospects do exist.

• Promote group morale and coerciveness.

5) HOW MIGHT A MARKETING MANAGER SEGMENT A MARKET FOR SHOES? [4]

• He can segment by age.

• He can segment by sex.

• He can segment by income.

• He can segment by location of customers.

6) EXPLAIN THE BENEFITS OF COMPETITION TO CUSTOMERS [4]

#IT BRING VARIETY

• Many businesses in the industry result in many goods being supplied which
gives consumers wide choice of variety.

#LOWER PRICES

• When businesses are competing for customers they normally give discounts so
as to lure customers thereby benefiting customers.

#QUALITY PRODUCTS

• To fight competition and customers businesses produce high quality products

thereby benefiting customers.

7a) DEFINE BATCH PRODUCTION [2]

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

• Is the production of goods in groups and each item in the group of products
passes through each stage of production.

b) EXPLAIN ONE ADVANTAGE AND ONE DISADVANTAGE OF BATCH PRODUCTION

[4]

ADVANTAGE

#BUSINESS ENJOY ECONOMIES OF SCALE

• Since goods are produced in groups business will buy raw materials in bulk,
thereby enjoying economies of scale which will in-turn lower unit costs.

DISADVANTAGE

#HIGH STOCK LEVEL

• High level of stock held as a result of these costs are going to highly incurred.

8a) EXPLAIN COSTS ASSOCIATED WITH;

i) HOLDING STOCKS [3]\

• Deterioration of stocks.

• Warehouse costs.

• Obsolescence costs.

ii) HOLDING INADEQUATE STOCK [3]

• Loss of customers/loss of sales.

• Idle production resources.

• Special orders could be expensive.

9) EXPLAIN ANY TWO ADVANTAGES OF DEBT FINANCE [4]

#NO DILUTION OF OWNERSHIP

• Debt finance does not dilute ownership and control since financial institutions
don’t become company ownership.

#LENDERS HAVE NO VOTING RIGHTS

• Lenders of debt finance have no voting rights hence have no input and do not
affect company decision making.

10) COMMENT ON ANY THREE LIMITATIONS OF ANALYSES [6]

• Inter-comparison may be difficult due to different accounting practice.

• Trends analysis might be affected by economic environment .e.g. inflation.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

• One ratio is not useful unless comparisons are made.

11) EVALUATE ANY TWO METHODS OF IMPROVING CASHFLOW IN AN

ORGANISATION [6]

i) DEBT FACTORING

• This will ensure immediate cash to the business.

• However the business will not recover all its amounts.

ii) CASH SALES

• This will help a business to have immediate cash without time.

• However this will deter customers and reduce sales.

12) ABC LIMITED ACCEPTS ALL INVESTMENTS WHICH PAYBACK INITIAL CAPITAL
OUTLAY WITHIN THREE YEARS.

Project X ($000)

Initial investment $4000

Net return Year 1 800

Year2 1000

Year 3 1500

Year 4 1400

Year 5 1650

Year 6 1700

Year 7 1750

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

a) USING THE PAYBACK METHOD, SHOULD ABC LTD ACCEPT THIS PROJECT? [2]

SOLUTION

Year Annual Cash flow Accumulated Cash

0 (4 000) (4 000)

1 800 (3 200)

2 1 000 (2 200)

3 1 500 700

4 1 400

Payback period = 3 years + 700 X 12

1400 1

= 3 years 6 months

b) EXPLAIN WHY THE PAYBACK METHOD MAY NOT BE A GOOD WAY OF DECIDING
WHETHER TO INVEST IN THIS PROJECT [4]

• It ignores the time value for money since it does not discount cash flows when
making decisions.

• It ignores the overall profitability of a project as it ignores all cash flows after
determine payback period.

c) RECOMMEND ANY OTHER METHODS ABC LTD COULD USE [2]

• Net present value (NPV).

• Average rate of return (ARR).

• Internal rate of return (IRR).

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

JUNE 2012 PAPER 1

1a) IDENTIFY ANY TWO METHODS OF PRIVATISATION [2]

• Decentralization.

• Delegation

• Contracting out.

2a) LIST ANY THREE TYPES OF BUSINESS FOUND IN THE PRIVATE SECTOR [3]

• Sole trader.

• Partnership.

• Limited company.

• Co-operatives.

b) EXPLAIN WHY GOVERNMENT MAY BE INTERESTED IN CONTROLLING AN

ORGANISATION WHICH SUPPLIES ELECTRICITY IN OUR COUNTRY [4]

• It is an essential commodity or basic necessity or strategic purpose which must

be provided to everyone which can only be done the government than private
institutions who can exploit customers.

• Government can control supply of electricity in a country because it has got

money to finance huge/substantial projects of electricity supply than private
institution.

3a) IDENTIFY ANY TWO FACTORS WHICH MAY INFUENCE LOCATION OF A FIRM[2]

• Proximity to raw materials.

• Availability of cheap labour.

• Nearness to markets.

• Government influence and policies.

b) EXPLAIN THE EFFECTS OF IMPORT CONTROL IN FOREIGN TRADE [4]

POSITIVE EFFECTS

• Makes imports expensive and correct B.O.P deficit.

• Encourage consumption of local goods.

• Increases government revenue.

• Discourage dumping of foreign.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

NEGATIVE EFFECTS

• Collapsing of local manufacturing firms.

• Limited raw materials may encourage use of low quality substitutes.

• Leads to poor living standards and restricted choice.

4a) WHAT IS MEANT BY THE FOLLOWING TERMS;

i) GRAPE VINE [2]

• These are rumors or gossip which circulate within an organization.

ii) LEADERSHIP [2]

• Is the art or process of influencing people so that they perform assigned tasks
willingly, effectively and efficiently.

b) OUTLINE THE ADVANTAGES OF “ALL LINE NETWORK” [3]

• All members participate.

• Sharing of information between all parties.

• Suitable for solving complex problems.

5) EXPLAIN THE MERITS AND DEMERITS OF A GEOGRAPHICALLY BASED

ORGANISATIONAL STRUCTURE [4]

MERITS

• Better communication at local level.

• Emphasize on local conditions and problems.

• It is a training ground for management.

DEMERITS

• Problems of control can occur.

• There is high cost.

6) EXPLAIN THE SIGNIFCANCE OF INTERNAL RECRUITEMENT TO A FIRM [4]

ADVANTAGES

• It fosters employee loyalty.

• It is cheap.

• It inspires workers to apply effort.

• Employees are well versed with the organizational culture.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

DISADVANTAGES

• May lead to complacency if promotion is based on seniority.

• Organization remains internally focused and new ideas are shut-out.

• Bad habits are nurtured.

7a) SHOW HOW THE GOVERNMENT MIGHT INFLUENCE DEMAND FOR A PRODUCT
[2]

• Government can purchase the goods itself.

• Can offer tax holiday on certain good or firms.

• Government can offer subsidies.

• Heavy taxation on demerit goods .e.g. tobacco.

b) HOW MIGHT THE INTRODUCTION OF INFORMATION TECHNOLOGY AFFECT AN

ORGANISATION [4]

POSITIVE

• Improved communication.

• Improved production process .e.g. CAD & CAM.

• Labour saving.

• Efficiency is increased.

NEGATIVE

• High initial costs .e.g. purchase equipment and retain workers.

• Employee problems .e.g. lack of job.

• Customer and suppliers problems also.

8a) WHY MAY A COMPANY TEMPORARILY SELL ONE OF ITS PRODUCTS AT A LOSS
[4]

• For sell of surplus stock.

• To encourage sales of other products or goods (loss leader).

• To drive competitors out of the market.

• To stimulate future sales of the product.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

b) A BUSINESS HAS DECIDED TO INCREASE THE PRICE OF ITS PRODUCTS FROM $1

TO $1.20. AS A RESULT SALES FELL FROM 1200 TO 900 PER WEEK.

(i) CALULATE P.E.D FOR THE PRODUCT [3]

Price elasticity of demand = % increase in quantity demanded x 100

% increase in price 1

% increase in price = new price – old price X100

Old price 1

= $1.20 - $1 X 100
$1

= 0.25 X100
1 1

= 20%

% increase in quantity = new quantity – old quantity X100

Old quantity 1

= 900 -1200 X100

1200 1

= -300 X 100
1200 1

= -25%

Therefore price elasticity of demand = % change in Qty demanded

% change in price

= -25%
20%

= 1.25

9a) ANALYSE THE POSSIBLE PROBLEMS OF INTRODUCING J.I.T MANUFACTURING

[4]

• Needs new machinery set up which is flexible but expensive.

• Loss of sales through sudden orders.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

• Vulnerable to strikes or absenteeism by workers.

• Suppliers may be unreliable.

b) HOW DOES WORK STUDY AFFECT MOTIVATE WORKFORCES. [4]

• It makes work easier by identifying the best way of performing a task (method
study) by a worker thereby motivating them to do the work and achieve set
goals.

• It gives workers challenge (Maslow’s hierarchy of needs)by determining the

maximum time the worker can take to compete a certain task (time
measurement) which motivates those workers who manage to surpass set
standard time.

10a) GIVE ANY TWO EXAMPLES OF INTERNAL USERS OF FINANCIAL

INFORMATION.

• Shareholders.

• Government.

b) A FIRM BUYS A MACHINE WORTH $20 000. ITS EXPECTED USEFUL LIFE IS 5
YEARS AND HAS A RESIDUAL VALUE OF $1 000.

CALCULATE THE DEPRECIATION CHARGE FOR THIS MACHINE IN YEAR FOUR,

USING

i) STRAIGHT LINE METHOD [2]

Annual depreciation = Cost – residual value

Estimated useful life

= $20 000 - $ 1 000

5

= $19 000
5

= $3 800

Therefore depreciation charge for year four = $3 800

ii) REDUCING BALANCE METHOD AT 20% PER ANNUM

Year 1 20 x $20 000 = $4 000

100 1

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

Year 2 20 x $16 000 = $3 200

100 1

Year 3 20 x $12 800 = $2 560

100 1

Year 4 20 x $10 240

100 1

therefore depreciation charge for year 4 is $2 048

11a) SUGGEST ANY TWO POSSIBLE SOURCES OF INTERNAL FINANCE [2]

• Retained profits.

• Sale of idle assets.

• Reduction in working capital.

b) HOW USEFUL IS AVERAGE RATE OF RETURN METHOD IN APPRAISING

INVESTMENT [4]

ADAVANTAGES

• It takes into account all cash flows in a project.

• It focuses on the central objective of the business which is profitability.

DISADVANTAGES

• It ignores time value of money.

• It ignores qualitative factors in investment appraisal.

12) THE FOLLOWING ARE THE MONTLY QUANTITES OF CHAIRS MANUFACTURED

BY CHILLE PRIVATE LIMITED IN 2008

Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Number 0f 200 150 100 200 160 110 100 300 200 134 240 350

chairs

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

i) GIVING EXAMPLES, DERIVED FROM THE INFORMATION IDENTIFY AND EXPLAIN

ANY TWO MEASURES OF CENTRAL TENDENCY [6]

#MODE

• Data with highest frequency.

• 200 chairs is the mode

#MEAN

• Average of given data

= 200+150+100+200+160+110+100+300+200+134+240+350
12

= 187 chairs.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

NOVEMBER 2012 PAPER 1

1a) STATE ANY THREE DIFFERENT WAYS IN WHICH THE SIZE OF A BUSINESS IS
MEASURED [3]

• Market share.

• Capital employed.

• Sales turnover.

• Market capitalization.

• Profit margins.

b) OUTLINE ANY THREE LEGAL CONTROLS WHICH MIGHT AFFECT THE WAY IN
WHICH A BUSINESS OPERATE [3]

• Labour law.

• Employment.

• Healthy and safety.

2a) SHOW THE DIFFERENCE BETWEEN THE PUBLIC SECTOR AND PRIVATE
SECTOR OF AN ECONOMY [3]

• Private sector businesses are owned and controlled by individual organization

whilst public sector businesses are owned and controlled by state/government
on behalf of the citizens.

b) WHY MIGHT SOME GOODS AND SERVICES BE PROVIDED BY THE PUBLIC

SECTOR IN COUNTRT?[2]

• Some ventures are too expensive for private sector.

• To avoid exploitative monopolies.

• For political, strategic or security reasons.

• For social welfare and affordability.

3a) WHAT IS AN ORGANISATIONAL CHART? [2]

• It is a pictorial or diagrammatic representation of functions, departments and

people in an organization.

b) EXPLAIN ONE REASON WHY AN ORGANISATION CHART WOULD BE USEFUL TO

THE EMPLOYEES IN A BUSINESS [2]

• Helps employees to see their positions.

• Helps employees to appreciate their responsibilities.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

• To see career path/promotional ladder.

• To know channels of communication.

• To help workers see who has authority over them and to whom they are
accountable to.

4a) HOW USEFUL IS ORAL COMMUNICATION IN AN ORGANISATION [4]

ADVANTAGES

• It is enhanced by gestures.

• Can be varied to suit the needs of different receivers.

• Immediate feedback.

DISADVANTAGES

• Can quickly be forgotten.

• No permanent records.

• Can be affected by noise.

b) COMMENT ON THE IMPORTANCE OF TRADE UNIONS IN EMPLOYER-EMPLOYEE

RELATIONS [4]

POSITIVE

• Help collective bargaining.

• Enforcing agreed policies.

• Educate members on labour issues.

• Give members legal representation.

• Discipline their members and counselling them.

NEGATIVE

• Trade unions make unrealistic demands.

• Trade unions may cause many conflicts.

5a) DISTINGUISH BETWEEN DOUGLAS MCGREGOR THEORY X AND THEORY Y [4]

THEORY X

• They are workers who are assumed to be inherently lazy and dislike work.

• They must be directed, controlled and coerced to work.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

THEORY Y

• They are workers who are assumed to seek responsibility and hard working.

• They exercise self-discipline and self-control.

b) HOW MIGHT THE DIFFERENCES IN THE TWO THEORIES BE REFLECTED IN THE

LEADERSHIP STYLE OF MANAGERS? [4]

THEORY X

• Managers adopt autocratic leadership style.

• One way communication.

• Centralization.

• No/little delegation.

THEORY Y

• Managers adopt democratic leadership style.

• Two way communication.

• Decentralization.

• High level of delegation.

6) STATE TWO REASONS WHY THE MARKET FOR A PRODUCT MAY DECLINE IN
SIZE [3]

• Technological changes.

• Changes in taste and preference.

• Cultural influence.

• Decline in disposable income.

• Increase in price.

• Competition.

• Demographic changes.

7a) OTHER THAN PRICE, WHAT OTHER FACTORS COULD CAUSE AN INCREASE IN
DEMAND FOR DEMAND OF MOBILE PHONES? [3]

• Rising income.

• Response to successful marketing or advertising.

• Increase in population.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

b) A BUSINESS SELLS A PRODUCT WHOSE DEMAND IS RELATIVLY INELASTIC.

EXPLAIN THE EFFECT ON SALES AND REVENUE OF A PRICE INCREASE [3]

• Under a relatively inelastic condition, any increase in price will lead to decrease
slightly in sales but however, resulting in increase in revenue.

8a) DEFINE THE TERM PRODUCT PORTFOLIO [2]

• Refers to a range of different products or brands which a company offers in a

given market as opposed to being a single product firm.

b) EXPLAIN THE IMPORTANCE OF THE PRODUCT LIFE CYCLE IN PLANNING A

PRODUCT PORTFOLIO [4]

#Companies want products in different stages of the life cycle to avoid problems such
as;

• Avoiding funding many new products.

• Avoiding funding expensive extension strategies.

• Avoiding having too many new products in decline.

• To enhance survival/continuity of a business.

• To maintain a balanced product portfolio.

• Cross subsidization will be possible.

9a) A COMPANY MANUFACTURES PRODUCT X AND FOLLOWING DATA IS SHOWN;

Direct cost per unit $70

Overheads $50 000

Current output $120 000 units

Selling price $140

Full capacity output $150 000 units

#FROM THE ABOVE INFORMATION, CALCULATE THE COMPANY’S CAPACITY

UTILISATION [2]

Capacity utilization = actual output X 100

Total full capacity output 1

= 120 000 X 100

150 000 1

= 80%

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

bi) STATE TWO WAYS IN WHICH A BUSINESS MAY ACHIEVE ADDED VALUE [2]

• Advertising or promoting a product.

• Branding or rebranding.

• Packaging.

• Selling products in an exclusive or luxurious retail environment.

ii) WHY IS ADDED VALUE IMPORTANT FOR BUSINESSES [4]

• It achieves unique selling point.

• Business obtain competitive advantage.

• It improves corporate image.

• It reduces the elasticity of price thus demand become price inelastic.

• Promotes marketing of products successful.

• It emphasizes strength of brand as opposed to just a product.

10a) DISTNGUISH BETWEEN ASSETS AND LIABILITIES OF A BUSINESS [4]

• Assets are goods of value of a company which generate income .e.g. motor van
Whilst, liabilities are obligations which leads to future cash outflow from a
business .e.g. loan or mortgage.

b) EXPLAIN WHY THE BUSINESS DEPRECIATE THEIR FIXED ASSETS [4]

• Business depreciate assets to spread the cost of an asset over its useful life
rather that use full amount as that in the year of purchase (matching concept).

• To depreciate assets is a fairer way of treating fixed assets to avoid overstating

profits or fixed assets (prudence concept).

11) BRIEFLY EXPLAIN WAYS IN WHICH A MANUFACTURER OF TOYS MIGHT FIND

BREAK-EVEN ANALYSIS USEFUL [6]

• B.E.P analysis is a technique that allows a business to see at what level of

output (toys) is total revenue just equal to total cost.

• A toy manufacturer can estimate the number of toys it must make and sell to
begin making profit (M.O.S).

• It can also allow the business to estimate the effect of profits of an increase in
fixed costs over time (useful in forward planning).

• Break-even analysis allows business to see the effect of the change in selling
price or variable cost on profits.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

12) THE FOLLOWING INFORMATION IS P[ROVIDED FOR PROJECT VUNUS;

Activity Preceding Activities Duration (days)

A - 5

B A 6

C A 3

D A 3

E B 2

F D 2

G B, C, F 9

H E 4

a) DEFINE THE TERM CRITICAL PATH [2]

• It is the sequence of activities within a project with the longest duration and
consumes most resources in a project.

bi) DRAW A NETWORK DIAGRAM FOR PROJECT VENUS.

ii) STATE THE PROJECT TOTAL DURATION [1]

• Total duration = 19 days.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

JUNE 2013 PAPER 1

1a) WHAT DO YOU UNDERSTAND BY THE TERM FREE MARKET ENTERPRISE? [2]

• It is an economic system where the resources are owned and allocated by

private individuals or private sector with minimum government intervention.

b) GIVE REASONS WHY A FREE MARKET ENTERPRISE MIGHT BE MOST

APPROPRIATE TO THE ECONOMY OF YOUR COUNTRY [3]

• There is free mobility of factors of production.

• There is high customer satisfaction from freedom of choice.

• There is increased variety of goods.

• There is quality goods and high standard of living.

2a) DEFINE THE TERM PROFOT MAXIMISATION [2]

• Is when a business is producing a the level of output where the greatest positive
difference between total revenue and total cost is achieved.

b) WHY MIGHT PROFIT MAXIMISATION BE CONSIDERED INAPPROPRIATE BY A

FIRM OTHER THAN SHAREHOLDERS [4]

#Profit may be achieved at the expense of other shareholders like:

• Producing low quality products to customer.

• Customers can be overcharged.

• Polluting environment.

• Businesses can avoid paying tax so as to maximize profits.

3a) SUGGEST WHY A SOLE MANUFACTURER FIRM MIGHT EXPAND THROUGH:

i) VERTICAL INTERGRATION [2]

• To assure continuous supply of raw materials (Backward Integration).

• To control distribution aspects and control profits (forward integration).

ii) HORIZONTAL INTEGRATION

• To fight competition.

• To achieve economies of scale.

• To increase market share.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

4a) STATE TWO FACTORS WHICH INDICATE FALLING MORALE IN A FIRM [2]

• Increase labour turnover.

• Low productivity levels.

• High rate of absenteeism.

• Increased machinery breakdown.

• Reluctant to take extra responsibility.

• Producing low quality products.

b) EXPLAIN WHY MANAGEMENT OF A FIRM WOULD WISH TO MAINTAIN A HIGH

LEVEL OF MORALE AMONG ITS WORKERS

#In order to achieve:

• High level of job satisfaction.

• Low level of machinery breakdown.

• High levels of productivity.

• Low levels of absenteeism.

• Low rates of labour turnover.

• Industrial harmony.

• Production of quality products.

• Low rates of accidents.

5a) GIVE TWO COMPONENTS OF JOB ANALYSIS [2]

• Job description.

• Job specification.

• Job rotation.

b) EXPLAIN TWO FACTORS WHICH INFLUENCE SPAN OF CONTROL WITHIN AN

ORGANISATION [4]

#NATURE OF TASK

• Tasks which are risk and complicated needs close supervision and monitoring
which implies narrow span of control and when tasks are simple and less risk
managers can use wide span of control.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

#EXPERIENCE AND SKILLS OF STAFF

• When workers are experienced they can do their own tasks with minimum
control which implies wide span of control unlike trainees who needs
supervision hence implies narrow span of control.

6a) WHAT IS PRICE ELASTICITY OF DEMAND [2]

• Is the degree of responsiveness of quantity demand due to change in the

products own price.

b) WHY MIGHT A FIRM WISH TO REDUCE ITS PRICE ELASTICITY OF DEMAND [3]

#Firm might wish to reduce P.E.D to achieve:

• High consumer loyalty or brand loyalty.

• Low brand switching.

• Increase total revenue.

7a) ASSESS THE CONTRIBUTION OF MARKET SEGMANTATION TO OVERALL

SUCCESS OF AN ORGANISATION

#Market segmentation help to ensure:

• More efficient use of marketing resources.

• Gain competitive advantages in part of the market.

• Beneficial for small firms to concentrate their effort.

• Products are tailored to meet demand.

• Use of appropriate strategies e.g. 4Ps

• It facilitates identification of market opportunities.

8a) THE MAIN FEATURE OF ANY PRODUCTION PROCESSS IS ADDED VALUE.

i) DEFINE THE TERM ADDED VALUE [2]

• Is the difference between total revenue of a firm and cost of materials services
and components.

b) EXPLAIN THE TERM LEAN PRODUCTION [3]

• Lean production refers to the practices meant to reduce waste, costs and
maximize quality .e.g. Just In Time, T.Q.M and quality circles.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

9) YOU ARE PROVIDED WITH THE FOLLOWING COSTS FOR A PRODUCT:

Costs for a product:

Fixed costs $50 000

Total variable costs $65 000 (output at 1 000 units)

Selling price per unit $90

CALCULATE:

(a) THE CONTRIBUTION PER UNIT OF OUTPUT [3]

Contribution = selling price per unit – variable cost per unit

= $90 – [$65 000]

1 000

= $90 - $65

= $25/unit.

(b) THE BREAK-EVEN LEVEL OF OUTPUT [2]

Break-even = total fixed costs

Contribution/unit

= $50 000
$25/unit

= 2 000 units

10) WHAT PART MIGHT BE THE GEARING RATIO PLAY IN:

a) A COMPANY’S POTENTIAL DECISION TO SEEK FURTHER CAPITAL [3]

• If the gearing ratio is high the company will no longer able to go for further
loans but for share capital probably.

• When gearing is low, then the company will go for loan capital.

b) POTENTIAL SHAREHOLDERS DECISIONS ON WHETHER BUY SHARES OR NOT?

[3]

• With a high gearing ratio a potential shareholder who is risk averse will not buy
the company’s shares.

• With a low gearing ratio risk averse potential shareholders will go for shares or
otherwise.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

11) THE FINANCIAL DIRECTOR OF A FIRM STATE THAT THERE IS AN URGENT

NEED TO INCREASE WORKING CAPITAL?

a) WHY MIGHT THERE BE THE NEED TO INCREASE THE FIRMS WORKING CAPITAL
[4]

• To avoid overtrading.

• To avoid stock outs.

• To avoid liquidation of business.

• To provide an opportunity to invest in other assets.

b) EVALUATE ANY WAYS OF INCREASING WORKING CAPITAL

#REDUCING DEBTORS COLLECTION PERIOD

• This will improve cash flow because business will recover its debts in a short
space of time. However, this can affect business sales in future as it can deter
customers away.

#INSIST ON CASH SALES

• This will ensure immediate cash and improve working capital of business.
However, this can affect business sales in the future as it can deter or chase
away customers.

12a) DISTINGUISH BWTEEN MODE AND MEAN [2]\

MODE

• Is the character with highest frequency on given data.

MEDIAN

• Is the character/item which is exactly in the middle/halfway when data is

arranged in order.

ii) UNDER WHAT CIRCUMSTANCES MIGHT A RETAIL OUTLET FIND THE MODE A
USEFUL CONCEPT? [2]

• To know which stocks to keep in numbers.

• Also help in marketing and serving the market.

b) COMMENT ON THE USEFULNESS OF KEEPING THE RIGHT LEVEL OF STOCK [4]

Business keep right level of stock to:

i) AVOID PROBLEMS OF HOLDING COSTS

• Capital tied up in stock.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

• Warehouse costs.

• Deterioration.

• Obsc0lesence.

ii) STOCK OUTS COSTS AVIODANCE

• Loss of production.

• Loss of sales.

• Loss of customer goodwill.

• Loss of bulk buying discounts.

• Paying of idle time.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

NOVEMBER 2013 PAPER 1

1) IDENTIFY ANY TWO FACTORS THAT MAY CAUSE A FIRM TO RELOCATE [2]

• Dying markets.

• Exhaustion of raw materials.

• State or political influence.

• Stringent local government regulations.

• Stiff competition.

• Economic instability.

• Shortage/limited land for expansion.

2a) OUTLINE ANY THEE PROBLEMS ASSOCITED WITH JOINT VENTURES [3]

• Finger pointing for errors and mistakes.

• Failure to blend different styles of management.

• Failure to blend different culture.

b) EXPLAIN TWO REASONS FOR DIVESTMENT [4]

• To refocus on core activities.

• To reduce diseconomies of scale.

• To improve liquidity by selling of underperforming parts of the business.

• To maintain corporate image.

3a) GIVE THREE REASONS WHY THE OWNER OF SMALL BUSINESS MIGHT DECIDE
TO REMAIN SMALL IN SIZE [3]

• To enjoy freedom and flexibility.

• To remain in control of business.

• To enjoy all profits.

• To avoid high taxes.

• To continue receiving government support.

• To enjoy personal contact with customers.

b) EXPLAIN HOW GOVERNMENT INTERVENE TO ASSIST BUSINESSES [4]

• Through training programs.

• Through tax exemptions.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

• Through offering grants, subsidies and loans.

• Through schemes to support exporters.

• Through providing platform for advertising products e.g. Harare Agric show,
Z.I.T.F in Bulawayo.

4) ANALYSE THE IPMACT OF A RISE IN INTEREST RATES ON A FIRM

MANUFACTURING TECHNICAL EQUIPMENT [4]

• Increase costs and reduce profits.

• Reduce borrowing hence reduce demand.

• May lead to appreciation of currency thus, making imports cheaper.

• Encourage saving by customer and reduce the demand for technical equipment.

5a) DEFINE A LINE RELATIONSHIP [2]

• It is a vertical relation between superior and subordinates in a scalar

chain/chain of command.

b) EVALUATE THE RELATIONSHIP BETWEEN LINE MANAGERS AND STAFF

MANAGERS [4]

POSITIVE EFFECTS

• Staff can offer specialist advice to line managers.

• Staff can offer a supportive role that frees up line managers.

NEGATIVE EFFECTS

• Friction may result especially in areas of authority.

• Two managers conflict on flexibility, technical and experiences.

6) DOES JOB ROTATION REALLY MOTIVATE WORKERS? [4]

ADVANTAGES/BENEFITS

• It reduces boredom and monotony thereby motivating workers.

• It increase variety of work by switching from one job to another and therefore
motivating staff/workers.

DISADVATAGES

• It does not satisfy a worker with complete unit of work.

• It does not increase empowerment and responsibility.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

7) WHAT ARE THE EFFECTS OF POOR COMMUNICATION ON INDUSTRIAL

RELATIONS [4]

• It leads to conflicts.

• It leads to low morale.

• It leads to lack of co-ordination.

• It leads to low co-operation.

• It lead to lack of control.

8a) IDENTIFY THE STRATEGIES THAT A FIRM CAN ADOPT GIVEN THE FOLLOWING
ACCORDING TO THE ANSOFF MATRIX [4]

• Selling the present product in present market> Market penetration.

• Selling the existing product to the existing market> Market

development/extension.

• Selling a new product to the existing market> Product development.

• Selling a new product in the new market> Diversification.

b) DISTINGUISH BETWEEN MARGINAL PRICING AND PERCEIVED VALUE PRICING

[4]

MARGINAL PRICING

• Cost based pricing to first determine additional cost of producing product then
determine price.

• It is a cost based pricing strategy.

PERCEIVED PRICING

• It is pricing based on the assumption that customers pay more for a high
quality product.

• It is a market based pricing strategy.

9a) DEFINE WORK STUDY [2]

• Is a series of technique used to determine the most efficient use of labour in

relation with other inputs like machines in production processes.

b) COMMENT UPON THE APPROPRIATENESS OF USING A WORKSTUDY

PROGRAMME BY A TIMBER MANUFACTURING FIRM WHICH IS FACING A HIGH
LABOUR TURNOVER PROBLEM [5]

BENEFITS

• It provide/establish basis for performance for incentive payments.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

• It improves flow of work.

• Establish easier methods of doing work.

• Improve utilization and safety equipment.

LIMITATIONS

• It is time consuming.

• Require participation by motivated staff.

10) WHAT ARE THE ADVANTAGES OF LINE PRODUCTION TO A COMPANY THAT

MANUFACTURES SOFT DRINKS [4]

• High productivity due to intensive use of machinery.

• Lower unit costs as a result of mass production.

• Less industrial disputes as a result of more work being done by machines.

• Ability to satisfy fluctuations in demand.

11) NAME ANY TWO SHORT-TERM SOURCES OF FINANCE [2]

• Bank overdraft.

• Trade credits.

• Debt factoring.

• Short term bank loans.

b) A LOCAL BAKERY FIRM IS PLANNING TO PURCHASE THE LATEST MODEL OF

MACHINERY WHICH COST $48 000. ITS GERAING RATIO STAND AT 60%

i) TO WHAT EXTEND IS PAYBACK PERIOD USEFUL AS AN INVESTMENT APPRAISAL

TECHNIQUE [4]

BENEFITS

• It is a quick screening method against a present.

• An early return quickly improves liquidation.

• Less risky because early returns are the more left.

LIMITATIONS

• It ignores the time value for money.

• It ignores cash flow after payback period.

• It ignores qualitative factors.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

iii) DISCUSS THE SIGNIFICANCE TO THE FIRMS OF GEARING RATIO [4]

#The firm has high gearing which help business to:

• Increasing capital wont dilute equity.

• Increase opportunities for equity shareholders.

• Provide interest which can be used for tax evasion purposes.

However, such high gearing ratio will:

• Increase risk of insolvency.

• Increase risk of company failure.

• Reduce business credit worthiness.

• Reduce dividends available to shareholders and profit for investment.

12a) Study diagram below.

In the decision tree diagram above, what is the significance of:

Answers i) The square is the point where decision is made.

ii) The circles is the point where outcomes are realized.

b) TO WHAT EXTENT CAN BREAK-EVEN ANALYSIS BE USED TO AID DECISION

MAKING BY A MANUFACTURING FIRM [5]

BENEFITS

• Used to discover how much should be produced to realize a certain level of

profit.

• It help to identify M.O.S loss and profit at different levels of output.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

• Enables comparisons between choices to show changes in situation

LIMITATIONS

• It is not appropriate for multipurpose products firms.

• Assumes a linear relationship between revenue and cost curves.

• It assumes no inventories and production is equal to sales.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

JUNE 2014 PAPER 1

1a) LIST TWO DRAWBACKS OF SECONDARY RESEARCH [2]

• Information is outdated.

• Information is irrelevant, because it is not problem specific.

b) STATE AND EXPLAIN ANY TWO ANSOFF MATRIX MARKETING STRATEGIES

THAT A TRACTOR MANUFACTURER CAN USE [4]

#Market Penetration

• It is achieving higher sales by selling existing products in an existing market.

#Product Development

• It means achieving higher sales by selling new product in an existing market.

#Market development/extension

• It means achieving higher sales by sales old products in a new market.

#Diversification

• it means achieving higher sales by selling new product in a new market.

2a) WHAT IS MEANT BY PUBLIC SECTOR OF THE ECONOMY? [2]

• Is sector of the economy dominated by government owned enterprises such as

parastatals like ZESA.

b) WHAT ARE THE ADVANTAGES OF A COMPANY THAT MIGHT CHOOSE TO GO

MULTINATIONAL [4]

• It enjoy economies of scale.

• It will access international markets.

• Easy access to raw materials.

• Enjoy free trade advantage in international economic region like COMESA,

SADC, EU, ECOWAS.

3a) DEFINE SPAN OF CONTROL [2]

• It refers to the number of subordinates who directly report to a single superior.

b) DISCUSS THE BENEFITS OF A WIDE SPAN OF CONTROL TO A FURNITURE

MANUFACTURING COMPANY [4]

BENEFITS

• Communication is effective and decision making is faster.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

• It reduce admin costs by employing few managers.

DRAWBACKS

• Limited interaction which demotivate workers.

• It lead to loss of control by managers causing in-efficiency by managers.

4a) MAKE A DISTINCTION BETWEEN ONE-WAY AND TWO WAY COMMUNICATION

[2]

• One way communication is method of communication that does not allow or

encourage feedback from the receiver whilst two way communication is
method of communication that allows and encourages feedback from the
receiver.

b) GIVE THE ADVANTAGES OF CIRCLE NETWORK OVER CHAIN NETWORK IN

COMMUNICATION [4]

• Circle network is quick way of disseminating information than chain network

where there is bureaucracy.

• Circle network is good way of decentralizing information to workers as it flows

freely than network.

5a) WHAT IS MEANT BY THE TERM PRICE ELASTICITY OF DEMAND? [2]

• Price elasticity of demand is the measure of the responsiveness of quantity

demand due to change in price of a product.

b) TO WHAT EXTENT IS THE KNOWLEGDE OF PRICE ELASTICITY OF DEMAND OF

USE TO A BAKERY? [5]

• Knowledge of price elasticity of demand is useful to a bakery because it can use

it to increase sales revenue. When the market of the bakery products is elastic a
bakery must reduce price of its products to increase sales due to its highly
responsiveness to price change when the market of the bakery is inelastic a
bakery must increase its price to increase sales revenue.

6) WHY IS PACKIGING AN IMPORTANT FACTOR IN THE SUCCESSFUL MARKETING

OF SOFT DRINKS?[4]

• Packaging facilitate branding since brands are written on a packing through

labelling.

• Packaging help to fight competition in the market as our products can be easily
identified.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

7) EXPLAIN THE FOLLOWING TERMS:

a) JOB ROTATION [2]

• Is the switching of workers from one job to another to increase flexibility and
variety of work.

b) JOB ENRICHMENT [2]

• Is the addition of totally new and challenging tasks to make workers use their
full abilities not just physical effort.

8a) DISTINGUISH BETWEEN:

a) ECONOMIES OF SCALE AND DIECONOMIES OF SCALE [2]

• Economies of scale refers to cost advantages enjoyed by being grow large

resulting in decreasing in cost as output increase whilst diseconomies of scale is
when too much growth of a business will disadvantage it as its costs will be
increasing as output will be increasing.

b) CAPITAL INTENSITY AND LABOUR INTENSITY [2]

• Capital intensity is whereby a firm use high value of capital equipment as

compared to labour for production whilst labour intensity is whereby a firm
uses a high level of labour inputs when compared to capital equipment for
production.

9a) WHAT IS MEANT BY THE TERM ECONOMIC ORDER QUANTITY? [2]

• Is that quantity of stock that if held, it will minimize the costs of both ordering
and holding and eventually lowering total inventory costs.

b) DETERMINE THREE FACTORS A RETAIL OUTLET WILL TAKE INTO ACCOUNT

WHEN CONSIDERING THE LEVEL OF STOCK IT CAN HOLD [6]

#STORAGE SPACE

• The higher the storage space available the higher the stock hold and vise-versa.

#USAGE RATE

• High usage will result to higher stock hold and vise-versa.

#LEAD TIME

• If lead time is longer then stock held will be higher to avoid stock-outs and
when lead-time is low then buffer stock/stock-held will be low.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

10a) CONTRAST THE TERMS LIQUIDITY AND PROFITABILITY [2]

• Liquidity is the ability of a business to pay its short-term financial obligations

when they fell due whilst profitability is the ability of the business to generate
revenue from its trading activities.

b) COMMENT ON THE IDEA THAT A BUSINESS DECLARING PROFITS MUST HAVE

POSITIVE CASHFLOW [4]

• The idea that business declaring must have positive cash-flow is situational as it
can be true when a business is selling all sales in cash bases paying all
expensive within their financial trading period and when it receive its
outstanding amounts from debtors within their trading financial period.

• However, the idea will be a gross miss-interpretation of facts because of

existence of non-cash items in a trading accounts based on professional
judgment like provision for depreciation and trading accounts include
unrealized income from credit sales.

c) EVALUATE THE IMPORTANCE OF MARGINAL COST PRICING [4]

BENEFITS

• It avoids inaccuracies and arbitrary allocation of costs by not including periodic

cost in terming product costs which do not affect pricing by increasing it.

DRAWBACKS

• It is not appropriate when a business is producing single product as all fixed

costs will be covered by single product’s contribution.

11) SHOW HOW A FIRM CAN USE THE CONCEPT OF COST BENEFIT ANALYSIS
WHEN CONSIDERING TO BUY MORE MACHINES FOR ITS OPERATIONS [5]

• Cost Benefit Analysis is the technique of evaluating planned action by

determining what’s the net value the plan will bring before embarking on such
an action. A firm can consider the benefits of acquiring more machine such as
operating more effectively, operating at a large scale and enjoying economies of
scale and achieving growth objectives.

• However, such a move must not be done without considering the possible costs
of buying more machinery. It requires a lot of capital which might be a
challenge, effects on unemployment and redundancy cost of workers.

• All in all after considering the costs and benefits of buying machinery, a firm
must see what outweigh another. If cost outweigh benefit it must stop and
vise-versa.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

12) TO WHAT EXTENT ARE COMPUTERS USEFUL TO A MOBILE NETWORK

PROVIDER [4]

#BENEFITS

• They are first to process data like of lines.

• Computers are accurate and more efficient than manual especially in

networking.

#DRAWBACKS

• Expensive to buy computer hardware’s and installing them.

• There is the cost of retraining workers for them to be able to use computers.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

NOVEMBER2014 PAPER 1
1a) DEFINE THE FOLLOWING TERMS:

i) MANAGEMENT BUY-OUT [3]

• This is whereby business sells shares to its managers thereby empowering

them.

ii) CONTRACTING OUT [2]

• This is whereby business activities are transferred to external vendor.

b) DISTINGUISH BETWEEN A PUBLIC LIMITED COMPANY AND A PUBLIC

CO-OPERATION [4]

• Public limited company business is found in private sector owned by private

shareholders of at least two to infinite e.g. Econet whilst public co-operation
business found in public sector and owned by government e.g. parastatals like
ZESA .

2a) LIST ANY TWO TYPES OF PRODUCTION METHODS [2]

• Job.

• Batch.

• Flow/continuous.

b) HOW CAN A MANUFACTURER OF CELLPHONES IMPROVE THE PRODUCTIVITY

OF HIS WORKERS? [4]

• Training workers.

• Motivating workers.

• Worker participation.

• Improving working conditions.

3) EXPLAIN ANY TWO COMMUNICATION PROBLLEMS THAT ARE BEYOND THE

RECEIVER’S CONTROL [4]

• Use of technical jargon.

• Use of ambiguous words.

• Use of wrong channel.

• Network problems.

• Technological failure.

• Environmental noise.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

4) STATE AND EXPLAIN ANY TWO NON-FINANCIAL METHODS OF MOTIVATION [4]

#JOB ROTATION

• Is the rotation of workers from one worker to another to avoid boredom.

#JOB ENLARGEMENT

• Is the addition of totally new and challenging tasks to make workers utilize
their full abilities and motivated.

4b) COMMENT ON HERZBERG’S IDEAS ON MOTIVATION. [5]

• Herzberg put forward concepts of hygiene factors and motivating factors of

motivation. One man’s hygiene factor can be another man’s motivator

• Hygiene factors are those that do not motivate workers but the avoid
dissatisfaction such as salaries, incentive and bonuses.

• Motivators are those factors which motivates workers such promotion of

workers and recognition.

• . However although hygiene factors do not motivate if managers fail to provide

motivators at least they must keep on providing hygiene factors e.g. bonuses,
increase salaries to avoid dissatisfaction of worker.

5) IS DEMOCRATIC LEADERSHIP STYLE NECESSARILY A GOOD MANAGEMENT

STYLE [4]

ADVANTAGES

• It motivates workers non-financially.

• Improves effective communication that is two way.

• It encourages worker initiativeness.

• It improves quality of decision making.

• Improves relationship between managers and workers.

DRAWBACKS

• Consultation with staff can be time consuming.

• Managers are at risk of losing control.

• Some issues might be too sensitive to require involvement.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

6a) WHAT IS NICHE MARKETING? [2]

• Is the identifying and exploiting small segment of a larger market by developing

products to suit it.

b) EVALUATE THE USEFULNESS OF MARKET SKIMMING [4]

ADVANTAGES

• Maximizes short-run profits before competitors enter.

• Quickly covers research and development costs.

• Attracts those customers who believe that high price means high quality.

• Works well when demand is inelastic.

LIMITATIONS

• Does not work when demand is elastic.

• It discriminates against low income earners.

7) A FIRM HAS TO DECIDE BETWEEN TWO ALTERNATIVE PROJECTS. THE COSTS

AND THE EXPECTED PROFITABILITY OF EACH OF THESE IS GIVEN BELOW:

Profit/Loss ($)

Project Cost If Successful If unsuccessful

X $20 000 $60 000 $3000

Y $35 000 $85 000 $(30 000)

-there is a 60% chance of project X being successful.

a) DRAW A DECISION TREE OF THE OPTIONS ABOVE [3]

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

b) JUSTIFY YOUR ANSWER, WHICH PROJECT SHOULD THE FIRM CHOOSE? [4]

Calculation of expected values

PROJECT X

E.V = Cashflows – initial outlay

[(60 000 x o.6 + 3 000 x 0.6)] – 20 000

= $ 17 200

PROJECT Y

E.V = Cashflows – initial outlay

[(85 000 x o.5 + (20 000 x 0.5))] – 35 000

= -2500

Decision

• The firm should choose project x because it has a higher and positive expected
value of $17200 than project Y which has a loss of $2500.

8a) WHAT IS BENCHMARKING? [2]

• It is when management identifies the best firm in the industry and then
compares the performance standards for improvement purposes.

b) ASSESS THE SIGNIFCANCE OF MAINTAINING QUALITY IN A BUSINESS

ORGANISATION [5]

BENEFITS

• May allow premium pricing since quality can be used as a unique selling point.

• Attracts a large customer/client base.

• Improves the firm’s corporate image.

• Result in patronage in sales to enjoy more sales.

• Good quality results in good publicity from consumer pressure groups.

LIMITATIONS

• High training costs.

• Inspecting and check costs.

• Material costs e.g. sourcing quality raw materials.

• Re-working defected products is costly and consumes time.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

9a) OUTLINE TWO ADVANTAGES OF THE PAYBACK METHOD [2]

• Easy to calculate and use.

• Provides a quick initial screening device.

• Emphases on early returns and therefore is good when liquidity takes

precedence over profitability.

b(i) WHAT IS INVESTMENT APPRAISAL [2]

• It is the assessment/analysis/evaluation of a project in order to see the wisdom

behind rejecting or undertaking it.

(ii)ANALYSE THE IMPORTANCE OF NET PRESENT VALUE AS A METHOD OF

EVALUATING PROJECTS [4]

BENEFITS

• It takes account the time value of money.

• It considers the whole life of the project.

• The rate of discount can be varied to allow for different economic conditions.

LIMITATIONS

• It is difficult to calculate (laborious).

• The final results depend heavily on the rate of discount used.

• Consumes time to use.

• It ignores qualitative information.

10) SHOW HOW A PRODUCER OF FLOUR CAN BENEFIT FROM BULK BUYING
ECONOMIES OF SCALE [3]

• Can be wheat in large quantities thereby receiving some bulk-buying discounts.

• Will charge low prices to final consumers and help to fight competition and
attract customers.

• Assuming that demand for flour is elastic, the producer will realize more
revenue.

11) IDENTIFY ANY TWO STAKEHODERS WHO ARE INTERESTESD IN THE

ACCOUNTS OF FIRM [3]

• Managers.

• Creditors.

• Shareholders.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

• Employees.

• Government.t

• Competitors.

b) DEFINE THE FOLLOWING:

i) ZERO BUDGETING [2]

• It is a budgeting process in which activities are analyzed if they are being

started for the first time.

ii) COST CENTRE

• Is a section of a business such as a department/product/process to which costs

can be allocated or charged.

12) DISTINGUISH BETWEEN MONEY MARKET FROM CAPITAL MARKET [4]

MONEY MARKET

• Is where short-term funds are raised.

• Example is bank overdraft.

CAPITAL MARKET

• Is where long-term funds are raised.

• Example is debentures, mortgage.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

JUNE 2015 PAPER 1

1a) WHAT IS MEANT BY THE TERM CORPORATE CULTURE? [2]

• Refers to the norms, beliefs and deep set values upheld within an organization
which in turn determine how things should be done in an organization.

2) DISCUSS THE ROLE PLAYED BY THE PRIMARY SECTOR IN THE ECONOMY OF

YOUR COUNTRY [4]

Primary sector play pivotal/important role because it:

• Create employment.

• Contribute to the gross domestic product.

• Generate forex through exporting.

• Contribute to import substitution drive.

3) DISTINGUISH BETWEEN ECONOMIC AND POLITICAL CONSTRAINTS? [4]

Economic

• Are factors affect business which encompass macro-economic objective of a

business e.g. inflation.

Political

• Are factors which affect business which encompass government legislation,

political environment, policies and strategies.

b) TO WHAT EXTENT SHOULD THE GOVERNMENT BE CONCERNED ABOUT THE

ACTIVITIES OF MULTINATIONAL COMPANIES? [5]

Government should to a greater extent worried about activities of multinational

companies because:

• They re-expatriate profits (huge sums).

• They exploit local labour and resources.

• They can left behind ghost towns.

• They can intervene in local politics.

• They can cause social externalities without compensation.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

4a) STATE ANY TWO METHODS OF STOCK CONTROL [2]

• Two bin system.

• Just in time method.

b) HOW MIGHT THE PRODUCTION MANAGER OF A DETERGENT COMPANY FIND

BENCHMARKING USEFUL? [4]

BENEFITS

• Cheaper and faster ways of solving problems.

• Results in continuous updating of performance.

LIMITATIONS

• It discourage initiative and originality.

• Success depend on quality of information gathered.

5) HOW MIGHT A MILLING FIRM BENEFIT FROM TRAINING? [4]

• Training leads to efficiency and reduce costs and wastage.

• Training reduces levels of accidents

• Training leads to improvement in productivity.

• Training instills confidence in workers and therefore motivate them.

6a) WHAT IS THE DIFFERNCE BETWEEN LEADERSHIP AND MANAGEMENT? [2]

• Leadership is the art of motivating and influence a group of people towards

achieving objectives whilst management is a systematic process of planning,
organizing, directing, co-0rdinating and controlling resources to achieve
organizational objectives.

b) EVALUATE THE EFFECTIVENESS OF AUTOCARATIC LEADERSHIP [4]

ADVANTAGES

• It serves time since it is one way communication.

• It is ideal in time of crisis like accident and also where an immediate response is
needed .e.g. army or police.

DISADVANTAGES

• It demotivates staff who wants to contribute and accept responsibility.

• Decisions made do not benefit from staff input.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

7a) STATE ANY TWO COMMUNICATION BARRIERS THAT LIES WITH THE SENDER
[2]

• Use of technical jargon.

• Sending message to wrong person.

• Choose of wrong communication channel.

• Wrong timing and ignorant receivers mood

b) EXPLAIN THE LIMITATIONS OF VERTICAL COMMUNICATION IN A TALL

ORGANISATION [4]

#BUREARUCRACY

• It result in too much steps to be followed from lower levels up to the top
managers.

#SOURCES OF BARRIERS

• It results in language barriers as it cause technical jargon due to different levels

on the hierarchy.

8a) EXPLAIN HOW A MANUFACTURER OF SOFT DRINKS MIGHT FIND PRICE

ELASTICITY OF DEMAND USEFUL [3]

• It helps in making pricing decisions.

• It helps in allocation of resources as firms will allocate resources in areas with

highest revenues.

b) THE FOLLOWING INFORMATION SHOWS THE EFFECT OF A PRICE CHANGE,

FROM $10 TO $15, TO A PRODUCT PRODUCED BY NYAKUNIKA LTD

Price($) Expenditure on advertising Sales(units)

10 5 000 20 000

15 6 000 22 000

Calculate the promotional elasticity of demand for this product [2]

Price elasticity of demand = percentage change in demand x 100

Percentage change in promotional/spending 1

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

= 2 000 X 100

20 000 1

= 10% (percentage change in demand)

= 1 000 X 100

5 000 1

=20% (percentage change in promotional elasticity)

Therefore promotional elasticity = 10

20

= 0.5

9a) EXPLAIN THE TWO CLASSES UNDER WHICH PRODUCTS ARE GRUOPED [4]

• Capital/industrial products.

• Consumer products.

b) WHY MIGHT A CLOTHES MANUFACTURING FIRM BE PREPARED TO SELL ITS

PRODUCTS AT A PRICE BELOW THE TOTAL COST OF PRODUCING IT [4]

• To fight competition.

• To clear stock about to expire.

• To penetrate the market.

• To attract customers.

• To cover part of its fixed costs.

10a) LIST ANY TWO FACTORS WHICH MIGHT INFLUENCE THE RELOCATION OF A
SHOE MANUFACTURER [2]

• Government policies.

• Stiff competition.

• Dying of markets.

• Depletion of raw materials.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

b) EVALUATE THE USEFULNESS OF THE FLOW PRODUCTION METHOD [4]

BENEFITS

• Unit costs are reduced as firms gain economies of scale.

• Production is highly mechanized hence goods produced are of high quality.

DRAWBACKS

• The setup is very costly.

• Breakdowns of machines affect the whole system.

11a) WHAT ARE THE FUNCTIONS OF THE STOCK EXCHANGE? [3]

• Listing and delist companies.

• Measuring performance of companies.

• Determine value of shares.

b) FOR WHAT REASONS MIGHT A BUSINESS MAKE PROVISIONS FOR:

i) Bad debts [2]

• To have true value of debtors in balance sheet.

• To be in line with prudence concept.

ii) DEPRECIATION [2]

• To have true value of assets in balance sheet.

• To be in line with the matching concept.

12a) THE FOLLOWING ARE MARKS OBTAINED BY BUSINESS STUDIES IN A GIVEN

TEST:

60 50 70 80 40 30 10

60 90 20 40 60 80 90

#FROM THE GIVEN SET OF MARKS, DISTINGUISH BETWEEN THE MODE AND THE
MEAN [4]

• Mode is a character with highest frequency like from above data 60 is modal
mark.

• Whilst mean is arithmetic average thus from test above:

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

60 + 50 + 70 + 80 + 40 + 30 + 10 + 60 + 90 + 20 + 40 + 60 + 80 + 90

14

= 680

12

= 48

b) WHAT ARE THE BENEFITS OF LINEAR PROGRAMMING? [3]

• Useful when firms are deciding on the best use of available resource.

• Can be used by managers to allocate resources between different products so

that costs are minimized.

• Can be fast if computer models are used.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

NOVEMBER 2015 PAPER 1

1a) IDENTIFY ANY TWO FORMS OF PROMOTION [2]

• Advertising.

• Publicity.

• Sales promotion.

• Personal selling.

b) WHAT IS:

i) A unique selling point? [2]

• These are features and attributes of a product that makes it different or unique
from those of the competitors.

ii) A CONSUMER PROFILE? [2]

• Is a quantified picture of consumers of a firm’s products, showing proportions

of age, income levels, gender, social classes etc.

2a) DISTINGUISH BETWEEN COMPETATIVE PRICING AND MARGINAL COST

PRICING [4]

COMPETATIVE PRICING

• It is competitor based pricing.

• This is slight manipulation of price depending on the competitor.

MARGINAL PRICING

• It is cost based pricing.

• Business first determine the additional cost of a product then determine price
thereafter.

3a) WHY ARE HUMAN NEEDS DIFFICULTY TO SATISFY? [2]

• Human needs cannot reach a point of satisfaction.

• They are not uniform i.e. they vary from one individual to another.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

b) EXPLAIN WHY SOME MERGERS MAY FAIL TO REALISE LONG LASTING GAINS [4]

#DISECONOMIES OF SCALE

• Business can be too big the extend that they will be difficult to manage, thereby
incurring losses.

#CONFLICTS

• Conflicts among the owners arise.

4) ANALYSE THE CONFLICT BETWEEN BUSINESS OWNER’S OBJECTIVE AND

GOVERNMENT’S OBJECTIVES? [4]

• Business are eager to maximize profits and it is from profits that government
want to charge tax thereby cause clash of interest as business end up evading
tax through various ways.

• Government also seek to protect environment through enacting pieces of

legislation which affect business profitability as business can end up being take
to courts and pay fine from profits for polluting.

5a) GIVE TWO EXAPLES OF:

a) DIRECT COSTS OF A DESK IN A FURNITURE MANUFACTURING FIRM [2]

• Timber costs and nails (raw materials).

• Wages and salaries of carpenters (labour).

b) INDIRECT COSTS TO A SUPERMARKET

• Electricity.

• Supervisor’s wages.

6a) WHAT IS THE DIFFERENCE BETWEEN CAPITAL AND REVENUE EXPENDITURE?

[4]

CAPITAL EXPENDITURE

• Money to buy or restore assets.

• E.g. money used to by building.

REVENUE EXPENDITURE

• Money used on day to day basis in business.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

• E.g. rental costs.

b) EXPRESS MOTORS (PVT) (LTD) A FIRM WHICH OFFERS TRANSPORT SERVICE,

NEEDS TO BUY A NEW VEHICLE WORTH $30 000 TO MEET THE INCREASING
DEMAND FOR ITS SERVICES [3]

• It can go for long-term source of finance such as mortgage.

• A mortgage does not dilute the ownership and control of a business.

• Mortgage has a fixed interest rate which helps in planning.

• However, mortgage interest is not accumulate has to be paid even when

business make loss.

7) HOW USEFUL IS INTERNET IN THE DISTRIBUTION OF A FIRMS’S PRODUCTS [4]

• Through the use of internet a business can get addresses, time and destination
of customers which will make it fast and easy.

• Business can also communicate with customers easily and make arrangements
of distributing it door to door agreed method.

8a) EXPLAIN THE IMPORTANCE OF CONTRIBUTION COSTING IN DECISION

MAKING [4]

#Contribution costing helps a business to make decisions on:

• Whether to make or buy products.

• Whether to accept a special order.

• Whether to close or not brand.

• To accept a contract.

b) K. FLOW MINERS LTD IS BOUND TO MAKE AN INVESTMENT DECISION MAKING,

CHOOSING BETWEEN TWO PROJECTS PROJECT A AND PROJECT B:

#UNDER WHICH CIRCUMSTANCE WOULD K. FLOW MINERS LTD CHOOSE TO

INVEST IN PROJECT B INTERNAL RATE OF RETURN IS 12%

It can choose IRR rate of 12% for Project B when other factors are favorable to so such
as:

• Motivation of staff is not affected.

• Project is not risk to workers.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

• When project does not require further staff training.

• When it is environmental friendly.

9a) OUTLINE ANY TWO ADVANTAGES OF INTERNAL RECRUITEMENT [2]

• It is cheaper since no external advertising is done.

• It promote career path for internal staff thereby motivate them as they will be
promoted.

b) IDENTIFY ANY TWO HUMAN PROBLEMS THAT MAY ARISE BY USING

COMPUTERS FOR BUSINESS COMMUNICATION? [2]

• Stress due to isolation.

• Computer related diseases .e.g. eye strains.

• Computer addiction.

c) GIVE ANY TWO FACTORS WHICH INFLUENCE THE EXENT OF

DECENTALISATION.

• Size of the organization.

• Nature of task to be performed.

10) EXPLAIN ANY TWO WAYS OF MINIMISING CONFLICT BETWEEN MANAGEMENT

AND THE WORKFORCE OF A CEMMENT MANUFACTURING FIRM [4]

#CONCILIATION

• Is when a third part come and help to bring conflicting part on negotiating
table.

#MEDIATION

• Is when a third part come and help to share views of conflicting parties until
they agree on one thing.

b) MR TINOKOHWA IS A LARGE-SCALE TOBACCO FARMER. ADVISE MR

TINOKOHWA ON THE IMPORTANCE OF WORKFORCE PLANNING [5]

• Enable acquisition of adequate and rightful human resource.

• It assesses current and future manpower requirement which is proactive to

future manpower problems.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

• It designs programs of training and development.

• It also come up with policies of promotion.

• It plan ahead for retirements redundancy and replacement procedure.

11a) OUTLINE:

i) TWO BENEFITS OF QUALITY ASSURANCE [2]

• Involve all staff which promote team work.

• It reduce costs of final inspection and therefore improve quality and profit.

ii) TWO LIMITATINS OF QUALITY CONTROL [2]

• It is a costly process to the organization.

• It shows the process of product launching especially feed forward process done
before product is made.

b) HOW MAY FIRM BENEFIT FROM A WORK STUDY PROGRAMME?

• It motivate staff.

• It improve staff performance.

• It result in increased productivity.

• It result in improved flow of work.

12) EVALUTE SUB-CONTRACTION AS A MEANS OF SOLVING A PROBLEM OF

CAPACITY SHORTAGE [4]

BENEFITS

• It relief capacity and it can be used for other purposes.

• It results in labor costs saving.

• Experts are hired who will be equal to the task hence improve quality.

DRAWBACKS

• Morale problems as in house workers will feel undermined.

• Less control over outsourced sub-components.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

• Overheads will be spread on few components which is costly to the

organization.

• All in all subcontracting is good means of solving problem of capacity shortage

in a business.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

JUNE2016 PAPER 1
1a) STATE TWO METHODS OF MEASURING SIZE OF A BUSINESS [2]

• Number of employees.

• Profit margins.

b) EXPLAIN THE LIMITATIONS OF THE METHODS WHICH YOU HAVE IDENTIFIED

IN (a) ABOVE [4]

NUMBER OF EMPLOYEES – It does not clearly indicate size of business because a

business might have low number of employees due to use of machines but yet big.

PROFT MARGINS – Profit margins normally are determine by type of stock e.g. a big
business might be selling groceries and realize low profits yet a small business motor
spares realizing high margins, hence profit margins will be misleading as a way of
measuring business size.

2a) GIVE ANY TWO MONETARY POLICY INSTRUMENTS [2]

• Interest rates.

• Exchange rates.

• Money supply.

b) EXPLAIN TWO OBJECTIVES OF A BUSINESS [4]

GROWTH– Business will be seeking to expanding both internally and externally to

enjoy economies of scale.

PROFIT MAXIMISATION – Business will be seeking to maximize profit and reduce

costs.

3a) WHAT IS DECENTRALISATION [2]

• This is when a business will give decision making powers to lower level or
regional managers.

b) HOW BENEFICIAL IS DELEGATION TO AN EXPANDING FIRM [4]

• It relieve top managers of trivial duties as they concentrate on more strategic

and critical duties such as investment and resource allocation.

• Delegation prepares lower level manager for managerial succession as the

business expand and open more branches.

4a) DISCUSS THE IMPORTANCE OF COLLECTIVE BARGAINING TO A LARGE FIRM

[4]

ADVANTAGES

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

• It creates harmonious, peaceful and workable industrial relations.

• It creates a sense of trust between employees and employers which reduce

industrial disputes.

DISADVANTAGES

• The process is time consuming and expensive to the organization.

• It reduces the level of respect between employees and employers.

5a) WHAT IS A MARKET? [2]

• Is when buyers and sellers contact each other and exchange goods for money.

b) ASSESS THE IMPORTANCE OF MARKET SEGMENTATION [4]

BENEFITS

• Helps in resource allocation.

• It helps to maintain the market needs and satisfy customer needs and wants.

LIMITATIONS

• Research and development costs are high.

• Production costs are high for product variation.

6a(i) State any two determinants of demand [2]

• Product price.

• Consumer income.

• Product quality.

• Season or time.

ii) DISCUSS THE BENEFITS OF THE KNOWLEDGE OF PRICE ELASTICITY OF

DEMAND TO AN ORGANISATION

#PRICING DECISIONS CAN BE MABE

• Business will know how to price its products depending on elasticity thus, high
prices for inelastic demand and low price for elastic demand.

#HELPS IN RESOURCE ALLOCATION

• Business will allocate resources accordingly thus more resources to those

products which are inelastic and less to elastic demand.

#HELPS IN INCREASING SALES REVENUE

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

• Business will know how to increase sales revenue thus can increase price for
inelastic goods and reduce price for elastic goods.

b) WHAT ARE THE LIMITATIONS OF PRODUCT LIFE CYCLE? [3]

• Product life cycle assumes all products reach a decline stage yet there are other
products which never follow several stages e.g. salt

• Product life cycle assumes that product performance pivots on 4Ps yet there are
other factors which affect product performance such as inflation, environment,
worker training, motivation and competence.

• Practical application of marketing strategies contradict with the model

application that the phase a product is in, determine the market strategy yet it’s
a strategy that determine the phase a product be in.

7a) DISTINGUISH BETWEEN JOB PRODUCTION AND FLOW PRODUCTION [4]

JOB PRODUCTION

• Small scale production of a non-standardized product normally produced

according to customer specification.

FLOW PRODUCTION

• Large scale production of a standardized product, where each operation unit is

performed continuously one after another, on production line.

b) THE PRODUCTION MANAGER OF A COMPANY MANUFACTURING COMPUTERS

HAS DISCOVERED THAT LABOUR PRODUCTIVITY HAS DECLINED

#HOW MAY THE COMPANY IMPROVE LABOUR PRODUCTIVITY [4]

• Training workers.

• Work study.

• Motivating workers.

• Job design.

8) EVALUATE THE BENEFITS TO BE ACCRUED FROM USING LABOUR-SAVING

TECHNOLOGY IN THE PRODUCTION PROCESS OF MOBILE PHONES. [4]

BENEFITS

• It reduces labour costs of the business thereby reduce overall overheads.

• It improves quality of cell phones produced by the business.

• It improves effectiveness and efficient of business operations of mobile phone

business.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

DRAWBACKS

• It results in unemployment of people since few people will be now required due
to use of machines.

• Its expensive to acquire machinery to support technologically advance

operations.

9) THE FOLLOWING INFORMATION WAS EXTRACTED FROM THE BALANCE SHEET

OF C.N LTD AS AT 31 DECEMBER 2013

Cash $30 000

Debtors $20 000

Stock $50 000

Creditors $30 000

Overdraft $50 000

a) Calculate the firm’s:

i) Current Ratio [2]

Current ratio = current assets

Current liabilities

= cash + debtors + stock

Creditors + bank overdraft

= [30 000 + 20 000 + 50 000]

[30 000 + 50 000]

= 100 000

80 000

= 1, 25: 1

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

ii) Acid-test ratio [2]

Acid test ratio = Current Assets – Stock

Current liabilities

= [100 000 - 50 000]

80 000

= 50 000
80 000

= 0,625 1

= 0,625: 1

b) COMMENT ON THE FIRM’S LIQUIDITY POSITION [3]

• The business is facing liquidity problems because using current ratio business
fail to attain 2,4 : 1 as it attain 1,25 : 1 and using acid test ratio it fail to attain 1 :
1 as it attain low ratio of o,625 : 1

10a) A FAST FOOD OUTLET WITH A GEARING RATIO OF 40% NEEDS TO RAISE $10
MILLION IN ORDER TO FINANCE A TAKEOVER BID.

a) DESCRIBE THE TERM GEARING [2]

• Is the extend with which a business is finance by external sources of finance.

• Business can be highly geared when mainly financed by external sources and
can be lowly geared when financed mainly from internal sources.

b) EXPLAIN ANY TWO SOURCES OF FINANCE THAT CAN BE AVAILABLE TO THE

FIRM [4]

i) LONG-TERM LOAN

• This is a bank loan given to firms by banks for financing operation in capital
nature.

ii) SELLING/ISSUING SHARES

• Business can sell shares to raise finance it need.

11) DIFFERENTIATE BETWEEN QUANTITATIVE AND QUALITATIVE INFORMATION

[2]

• Quantitative information is the one which is factual and can be expressed

numerically or can be counted, or be measured. Whilst qualitative information

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

is the one which cannot be expressed in numerical values or cannot be

measured or not counted.

12) IT HAS BEEN REPORTED THAT DIAMOND DEPOSITS HAVE BEEN DISCOVERED
IN BIKITA DISTRICT. EXPLAIN HOW COST AND BENEFIT ANALYSIS (CBA) CANBE
USED TO DETERMINE WHETHER THE GOVERNMENT SHOULD EXPLOIT TH
MINERAL [5]

• Cost and benefit analysis is the technique of evaluating a planned action by

determining what’s the net value the plan will bring before embarking on such
an action. From the above plan of government to exploit diamond in District
Bikita, it should consider the benefits of such a move to both citizen or the
government as well as cost of such to both citizen or government.

• Exploitation of diamond in Bikita will benefit the community by creating

employment, develop infrastructure such as building of schools, roads, shops,
clinics etc and at large, improve their living standards as a community. On the
same not government will benefit by gaining foreign currency which will go a
long way in boosting economic growth and development at large.

• However, such a move to exploit diamond in Bikita district will have negative
impacts on both community in Bikita and government. Residents of Bikita will
have to be relocated from their traditional location thereby breaking their
family ties i.e. both spiritual and physical. On the same note government will
incur costs of compensating affected residents by building them new houses
and other packages.

• All in all government should evaluate as above cost and benefit of such a move
from above government can exploit diamond in Bikita because it will benefit
Zimbabwe economy at large not only Bikita community.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

NOVEMBER 2016 PAPER 1

1a) STATE HOW ECONOMIC ACTIVITES ARE CLASSIFIED [3]

• Primary.

• Secondary.

• Tertiary

b) EXPLAIN HOW THE STATE MIGHT INTERVENE TO CONSTRAIN BUSINESS IN

YOUR COUNTRY [4]

#LEGISLATION

• Government can enact laws which can affect business negative or positive e.g.
location laws and advertising laws.

#TAXATION (POLICIES)

• Policies implemented by government such as taxation will negative impact

business as it increase business cost of production.

2a) DISTINGUISH BETWEEN FISCAL PLOLICY AND MONETARY POLICY [2]

MONETARY POLICY

• Refers to the deliberate attempt by the government to achieve macro-economic

objectives through its instruments like interest rates, exchange rates and
money supply

FISCAL POLICY

• Is an attempt by the government to achieve macro-economic objectives and

regulate the economy through instruments like government expenditure and
taxation.

b) STATE ANY TWO EXAMPLES OF EXTERNAL STAKEHOLDERS OF A BUSINESS [2]

• Government.

• Financial institutions (banks).

3) HOW MIGHT MANAGEMENT INCREASE THE WILLINGNESS OF EMPLOYEES TO

ACCEPT CHANGE IN AN ORGANISATION [4]

• Offering financial rewards.

• Communicating and educating workers.

• Manipulation and co-optation.

• Implicit and explicit.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

4) EVALUATE THE RELATIONSHIP BETWEEN LINE AND STAFF MANAGERS [4]

• Line and staff managers have an integral relationship of assisting each other
e.g. staff managers provide advisory role to line managers but however the
two managers relationship can be affected by conflict of interest inter-role
dependency levels of education and experience of the two managers.

5) DISTINGUISH BETWEEN VERTICAL AND HORIZONTAL COMMUNICATION [4]

• Vertical communication is communication of people at the same level within

an organization e.g. managers whereas horizontal is communication of people
who are not on same level e.g. workers and managers.

6) ASSESS THE RELEVANCE OF ELTON MAYO’S IDEAS IN MOTIVATING WORKERS

[5]

• Elton Mayo propounded the theory of Hawthorne effect where he concluded

that workers only work hard when managers are concerned about their social
welfare and give them room to interact. Mayo’s findings are relevant in
motivating workers as workers are also motivated by non-financial factors
such as informal groups and team however he over look issue of financial
motivators.

7a) WHAT IS THE DIFFERENCE BETWEEN NICHE MARKETING AND MASS

MARKETING [4]

• Niche marketing is the identifying of a small segment of the large market and
exploit it by developing products that suits it, It is done by businesses dealing
with unique and exclusive products. Whereas, mass marketing is the selling of
same product to whole market with no attempt to target any group within it, it
is done by business dealing with necessities e.g. Bread, Drinks, salt

b) TO WHAT EXTENT IS THE KNOWLLEDGE OF PRICE ELASTICITY OF DEMAND

USEFUL TO A MANUFACTURER OF SHOES? [4]

• To a greater extend knowledge of price elasticity demand is useful as it can be

used to increase sales revenue.

• By knowing the elasticity of demand of a market of shoes business can charge

appropriate price to increase sales revenue thus inelastic markets business
must charge low prices of its shoes to maximize sales revenue and charge high
prices to inelastic market to increase sales revenue.

8) EXPLAIN THE LIMITATION OF VALUE ANALYSIS TO A CAR MANUFACTURER [4]

#IT IS EXPENSIVE

• The process of value analysis is costly because it requires highly experienced

personnel such as value engineers and resources to research designs

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

#TIME CONSUMING

• Value analysis can delay development and launching of new cars because of
processes involved.

9) DEFINE THE FOLLOWING TERMS:

a) CAPACITY UTILISATION [1]

• It is the extent to which firm’s resources are exploited or used to achieve

organizational goals.

b) BENCHMARKING [1]

• Is the identification of the best firm in the industry and compare their
standards with theirs with the aim to improve.

10a) DISCUSS STUDY USEFULNESS OF A WORK STUDY PROGRAMME TO A LARGE

BUSINESS [4]

• It improves employee performance within an organization.

• It improves the utilization of resources within an organization.

• However, Work study is time consuming process within a large organization.

• It needs constant updating in an environment to meet new demands.

bi) HOW DO PRODUCERS CLASSIFY COSTS OF PRODUCTION? [2]

• Variable costs.

• Fixed costs.

ii) EXPLAIN THE IMPORTANCE OF BREAK-EVEN ANALYSIS TO A CEMENT

PRODUCER [4]

• It helps a business to determine profits and losses at different output levels.

• It determines the level of sales required to cover a reasonable return on

investment.

• It guides the setting of price to determine profit.

• It determines the margin which measures degree of risks.

11a) EXPLAIN THE ROLES OF MERCHANT BANKS TO AN EXPORTING BUSINESS [4]

• Offer finance to exporting companies.

• Give advice to exporting companies.

NB-Explain these two to get maximum marks.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.
 ALL THE RESEARCH WAS DONE BY MR .B .MURANDA…………0773862048….0718713861..LETS DO IT .

bi) DEFINE THE TERM DEPRECIATION WHEN APPLIED TO FINAL ACCOUNTS [2]

• Is the loss in value of an asset due to use in a business.

ii) WHY MIGHT PROFITABLE BUSINESS HAVE LIQUIDITY PROBLEMS? [4]

• Decision trees.

• High gearing.

• Accumulating high stock levels.

• High dividends declared to shareholders.

12) STATE ANY TWO DECISION-MAKING TOOLS [2]

• Decision trees.

• Linear programming.

• Investment appraisal techniques.

• Network analysis.

b) EXPLAIN ANY ONE MEASURE OF CENTRAL TENDENCY [2]

MODE

• Is a set of data with the highest frequency in given data.

• It can be used to determine production and marketing of firm’s products.

c) WHAT IS THE IMPORTANCE OF INFORMATION TECHNOLOGY TO A MARKETING

DEPARTMENT? [4]

• Technology is important to marketing because it makes marketing easy

through use of internet.

• Business can reduce cost of field marketing as it can now be done online or on
internet.

BOSS MURAH AT IT AGAIN ………..IT WILL NEVER GET BETTER THAN THIS.