ST. JOSEPH COLLEGE BUSINESS SUBJECTS DEPARTMENT MARKING KEY COMMERCE Paper 2 FORM 4 END OF YEAR EXAMINATION 2021 QUESTION 1 Kabo is operating Butchery in Mahalapye village as 2 sole proprietor (a) (i) State three feature of a sole proprietor. - Single ownership - Unlimited liabilities - Capital provided by the owner = One man contro! - Lajoys profits aione bears the risk aione - No special legislation required like publication of annual reports 3*1 points [3marks} (ii) Explain the importance of Banking to Kabo’s Butchery. - Provides accounts (savings and cheque accounts)(1) for safely of money and for transactional purposes.(1) = Online banking services(1) used for payments and transfers of monies both locally and internationally (1) - Provides loans and bank overdrafts (1) to enable him expand his business, pay workers, bills (1)- Advice on investment (1) the bank provides information on interest rates, foreign exchange rates Any other relevant points Listing of points a maximum of 2 marks Any 2 points well explained (2x2 total marks 4) (b) Describe two processes Kabo’s Butchery should follow when choosing a supplier. ~ Define the need (1) the business has to identify their needs (equipments required , stock) (1) draw up the specifications (1) ~ Hentify suppliers’ Research the Market (1) who are the suppliers (reliability, services terms and conditions) (1) ~ Send letter of enquiry (1) to various suppliers with specifications, quantities and lead time ~ Evaluate response/quotation (1) from the various suppliers considering Price, quality, delivery and payment terms (1) - Choose the best supplier (1) Any other relevant points Listing of points a maximum of 2 marks Al 2 points well explained (2x2 total marks 4) (©) Kabo’s Butehery wishes to buy equipments on hire purchase from western suppliers. Evaluate the use of hire purchase to Kabo Butchery, Enables the immediate use of the goods (equipments) (1) whilst paying over a period o: time! 1) is theretore . raises the Butchery proauctvity ane service levels mence more profits (1) ~ Savings’ more capital for the business (1) it will allow the business to owner more assets even with little capital without much inconvenience (1}this also enables the business to have money for other expenses() ~The Butchery stands the risk of having the goods repossessed (1) due to none payments (1) and this would be disruptive to the business resulting into loss of customers and hence loss to the business(1) ~ _Impulsive/rash buying (1) and when business environment becomes uncertain less income will be received (1) hence this causes distress and results in cashflow problems.= No legal ownership of the assets bought (1) kabo Butchery will only legal own the items afier the last installments has be paid (1) hence the equipments cannot be sold to raise capital (1). - High interest rates (1) this makes the equipments expensive (1) and the business may not make any savings by using this method. Any 3 points developed and effect shown 3x3 [9 marks] 3 points developed and not critiqued/ concluded (3x2) 6 marks ted max 3 marks 3 points QUESTION 2 Batho Wholesalers is cash and carry wholesalers and sells its goods locally. The manager ‘emphasizes the importance of good customer service. The wholesaler is facing competition from large scale retailers. (a) List one other type of wholesalers other than cash and carry. - General Wholesalers - Specialist wholesalers, Any point max 1 mark [1] (b) Describe three characteristics of the cash and earry wholesalers. Characteristics: = No credit services (1) goods are offered on a cash and carry basis only (1 = Donor ofter delivery oF transport services (1) customers have to arrange for their ows aranspor - Mainly offer groceries (1) food stufi. toiletries (1) - Sell in relatively small quantities (1) to retailers as well as consumers.(1) Any other relevant points Listing of points a maximum of 3 marks Any 2 points well explained (2x3 total marks 6) (c) Evaluate three ways that the wholesaler should adopt in order to survive competi - Set up large-scale retail outlets operating regionally, nationally and even internationally (1) with some customer reward systems. E.g. Sefalana (1) hence this has led to increased sales hence their survival. (1)Requires few sales assistants (1)hence low wages are paid (1) even though more trading space is required(1) Goods are easy to find (1) as they are displayed section by section (1) however goods cannot be inspected as they are pre packaged. (1) Time saving and fast(1) as customers choose what they want and pay(1) even though there is no personal attention(1) Impulsive buying (1) which may increase sales(1) however shoplifting is common(1) 3) Tsotlhe Furnitures has several stores in Botswana. He specialises more on customer service as they will sell their furniture on credit. a) Explain two feature of good customer service. Staff(1) should be well trained, ready to take prompt action, knowledgeable and confident(1) Premises(1) should be clean and appealing(1) Product{1) should of high quality(1} 4 After sale service a ch Discos ees b) Explain the benefits of selling on credit to Tsotlhe Furnitures Cenc Enwere ‘More sales(1) as customers are attracted to buy even if they don’t have money(1) Increased revenue(1) for Tsotthe furnitures as they may charge interest(1) ©) Evaluate the use of hire purchase to the business. Payment spread over a long time(1) hence people are able to buy expensive goods which helps increase sales(1) eventhough some buyers may default(1). Safe means of selling goods(1) since they can be repossessed if the buyer defaults(1) but goods repossessed may be too old to be sold(1}/ may tarnish image of the trader. “Trader can maintain her customers (1) as they can buy as they come to pay their instalments(1) even though they maybe unattracted as they have a huge debt. ‘Trader gets high profit mergin(1) because goods sold by hire purchase carry high interests(1) even though too much is tied up in debts(1)/ high inflation rate may affect trading,Mid es” \3 co Mpho is a farmer at Mogobane Farms. He specializes in crop production and grows sorghum and mai: He sells his products to the local community and sometimes to Botswana Agricultural Marketing Boar (BAMB). a. Explain the type and stage of production he is Involved in. 1. Indirect production (1) - making goods for sale (2) 2. Either primary Stage or Tertiary stage (1) extraction of raw materials from nature (1) or distribution goods to the consumers (1). Respectively 1 method explained 2x1=2marks (b) Explain two ways in which commerce is part of production. 1. Production is rneant for consumption (utility) (1) and commerce provides link between producers a) consumers through wholesalers and retailers (1) 2. Commerce avails goods to the consumers through aids to trade e.g transport (c) Explain two advantages of specializing in crop production © Workers become skilled (1) because they repeat the same job (2]however they become bored(1) . ‘* More goods can be produced(1) because machines may be used(1) however there may be lost of jobs (1) © Time is saved(1) because of workers do not move from one job to another (1) however if one ‘employee is absent then production stops(1) © Training becomes much easier © Makes use of everyone ability 3 points developed and applied and critiqued 3x3-9marks 3 points developed 3x2=6marks Bpoints listed 3 marks (4) Discuss two Ways in which Botswana Agricultural Marketing Board (BAMB) might assist Mpho Buy Moho sorghum (1) ~ providing a guaranteed ready market (1) however they may pay lower prices (1) Collection of produce (1) ~which may relieve Mpho of problems of transport (1) however transport mat not reliable ~ may take long to collect(1) Providing farm inputs at reasonable price (1) thereby reducing Mpho's cost. However may not be the right typeResearch (1) may improve production (1) however they may be shortage of personnel 2 points developed, applied and critiqued 6 marks 2points developed not applied 4 marks 2 points listed 2 marks 2. Siphe owns a supermarket in Ramotswa village. The supermarket is experiencing an increase in sales despite competition from other retailers. (a) (i) State two features of a supermarket. '* Wide range of goods * Self-service / goods well displayed on shelves © Many checkout points © Trolleys and baskets for customers 2 points listed 2 marks 1 point listed 1 mark (ii) Explain two reasons why there is an increase in sales in Sipho's supermarket © Regular promotions/advertising © Competitive pricing * Good customer service © Clean premises * Goods displayed in neat shelves and appropriate sections 2 points explained and applied 2x2=4marks 2 points listed 2 marks (b) Explain one advantage and one disadvantage of the supermarket to the retailer Adv Clever display of goods then impulsive buying Labor saving because of self service Lower purchase price from the factory dis Shoplifting or pilferage possible Requires a lot of space and rents can be very high Equipment's such as trolleys, shopping baskets and surveillance cameras needed which increases costs2 points explained and applied 2x2=4marks 2 points listed 2 marks (c) Discuss how the following trends might contribute to continuous existence of the supermarket 1. Branding Gives goods individual identity so that they can be easily seen by customers without the aid of sales assistant Makes advertising easy Dis Brands requires advertising which is costly Increase competition which affect the company’s profit 2. Self service Advantages © Fewsales assistant © Increase in sales ¢ Less work for the retailer Disadvantages © Shoplifting resulting in losses to the shop © No personnel contact «Provision of trolleys and shopping basket may be expensive 2x3 points developed, applied and critiqued 6 marks 2 points not applied but critiqued 4 marks 2 points listed 2 marks (¢) Differentiate between small scale and large scale retailer 4 marks ‘Small scale retailers Large scale retailers, ‘Small amount of capital Large amount of capital ‘Small in size Large in size Cannot afford specialist staff Can afford specialist staff Buy from wholesalers Buy directly from wholesalers(e) Analyze the importance of good customer service to supermarkets © Loyalty of customers ‘© good image before the public © Increased turnover © Gives an edge over competitors ‘ 2 points developed, applied and concluded 6 marks 2 points developed not applied 4 marks 3. Dira runs a wholesale business in lobatse. The business sells variety of goods. The customers are mainly small scale retailers. (a) What is meant by wholesale trade? A business buying goods from manufacturers in large quantities (1 and selling goods in large quantities to the retailers (1). (©) Explain two functions of wholesale trade [4] © Warehousing © Risk bearing * Keeping prices stable © Breaking bulk © Providing a variety 2x2 points explained 4 marks 2 points listed 2 marks (C) Assess two ways in which small ~scale retailers in lobatse would be affected By business. Adv. ‘ Access to a variety of goods which leads to customer satisfaction ‘Steady supply of goods therefore customer loyalty Reduction in cost ~close proximity Dis Restricted to what is being sold by wholesaler May increase competition as wholesaler may sell directly to consumer 2x3 points explained and applied 6 marks 2x2 points explained not applied 4 marksee. (a) Discuss two ways in which the formation of voluntary chain might help small scale retallers to compete with large scale retailers successfully. © Advice on better selling ways of selling the goods (1) which can lead to the success of the business however may not be applicable elsewhere © Offer training (1) which may lead to better business decisions © Advertising is generic(2) which reduces advertising costs however individual image is not considered © Access of goods at cheaper prices for they are buying at factory pries however may get popr quality ® Delivery of goods (1) which reduces transport costs however there may be late deliveries 3x3 points both sides developed, concluded/ points developed and critiqued 3x2 points developed 6 marks 3 points listed 3 marks (e) Explain two factors that leads to elimination of wholesalers from the chain of distribution. © Where manufactures appoint agents to sell their products «© Where manufacturers decide to sell directly to consumers * Efficient transport and communication such that retailers can stock quickly from producers If there is need for speedier distribution of goods like in the case of perishables 2 points explained 4 marks 2 points listed 4, DIT Enterprises sells furniture to their customers on hire purchase. They also entered into a legally binding agreement with another company on sale. (2) Explain the term hire purchase Hiring an item whiie paying to acquire it (b) identify four consumer rights © The right to be heard © To right to be informed © The right to healthy environment © The right to consumer education 4 rights identified 4 marks 3 rights listed 3marksPe (c) DIT Enterprises could either continue using hire purchase or use deferred payment. Discuss both options, Which would you recommend for DIT. Give three reasons for your recommendation, Hire purchase is safe method because goods can be reposed however the goods may be mishandled Deferred payment may increase the customer loyalty which lead to word of mouth advertising however law suits to defaulters may tarnish the image of the business Hire purchase © Safe method © Spread of payment © Business retains customers © Higher profit margin due to interests paid Points developed and critiqued 9 marks Points developed and not critique 6 marks 3 points listed 3 marks Computers to (a) Evaluate the usefulness of DIT Enterprises Point of sale terminal Electronic cash transfers Storage of information. Advertising 2 positive points developed applied and critiqued 6 marks 2 positive points developed not applied 4 marks 2 points listed 2 marks\3s COWES COMMERCE FORM 4 END OF YEAR 2018 L.MG (Pty) Ltd specialises in selling localiy produced herbs and vegetables. The business distributes its products in Modipane and surrounding villages. a)(i) Explain the meaning of production ? (2) All activities which bring-about goods & services a) Order to satisfy human needs & wants qa) Creation of utility (1) or usefulness (a) (Explain the stage of production MG (Pty) Ltd involved in ? (2) TERTIARY STAGE (1) Because it basically distributes or sells herbs & vegetables (1) b)(i)Discuss two disadvantages of specialization to MG’s (Pty) Ltd. (6) WORK BECOMES BORING 1] Due to repetition of task, work may become less challenging to the employees which may lead to poor presentation of vegetables (1) HOWEVER; Repetition of tasks may lead to skillfullness (1) hence appealing lattractive vegetables / herbs. PEOPLE MAY BECOME DEFENDENT UPON EACH OTHER (1) As employees task depend on that the next person, if one is absent from work then production (vegetable distribution} comes to a stand still (1) HOWEVER There is full use of everyone’s ability (1) OR Workers become too dependent (1) Absenteeism of one employee leads to vegetable distribution halt (1) HOWEVER Time is saved since there is no movement between operations. AORP 3 x 3 points (negative) developed & applied with a criti oe(ii) Describe two ways how specialization relates to Trade. (4) Trade is the cause & consequence of specialization (1) Individuals and retailers but) vegetables from MG leading to profits which enables it to stock even more herbs / vegetables to sell (1) Specialization enables people to trade so that they can get what they cannot produce (1) This leads to interdependence as vegetable farmers enable consumers / retailers to survive through selling their vegetables. (1) ©) Discuss the Importance of the following branches of commerce to MG (Pty) Ltd. (9) (Advertising: . Helps MG (PTY) Ltd to obtain information regarding sources of supply of vegetables & herbs (1) This enables it to be able to stock a variety of its products and satisfy its consumers: HOWEVER Advertising / some adverts may be misleading. (i) Transport: Enables MG (PTY) Ltd to move its vegetables / herbs to its consumers for sale (1) more its workers to & from the factory for effective production (1) Move stocks of herbs / vegetables to the factory for sale (1) HOWEVER some fuel used by transport modes may pollute the environment. (1)Commerce Gra of gerte JF CO} b Merakwa beg 1 Mr Moagi specialises in selling locally produced herbs and vegetables. He distributes his, produce to Ramotswa and surrounding areas. )(I) Explain the meaning production. All activities which bring about goods and services (1) in order to satisfy needs and wants (a) (ti) Explain the stage of production Mr Moagi is involved in. Tertiary stage (1) Mr Moagi distributes herbs and vegetables. (1) —(b)(!) Discuss two disadvantages of specialisation to Mr Moagi. Work becomes boring (1) due to repetition of tasks as work may become more challenging to the employees which may lead to poor presentation of vegetables (1) however repetition of tasks may lead to skilffullness(1) hence appealing vegetables and herbs. People may become dependent upon each other(1) as employees tasks depend on that of the next person, if one person is absent from work then herbs and vegetables distribution comes to a stand still (1) however there is full use of everyone’s ability.(1) { (i) Describe twp chains ee may adopt to distribute his vegetables. i. ProduGer-- consumer (1) This is because vegetables are perishable (1) 2, Producer~ Retailers are closer to consumer (1) retdiler—-consumer (1) {c) Discuss the importance of the following branches of Commerce to Mr Moagi. Advertising Helps Mr Moagi to obtain information regarding sources of supply of vegetables and herbs(1), this enables it to be able to stock variety of vegetables and satisfy his g-(4) customers(1). However some adverts may be mislea TransportEnables Mr Moagi to move vegetables and herbs(1) to its consumers for sale (1) however it may be costly for him as he will incur motor expenses which may reduce his profits (1) Communication Helps Mr Moagi to get into contact with his customers (1) to remind them to make payments (1) However 2. Thato owns a chain of supermarkets. Goods are purchased directly from the manufacturers and dispatched to the branches from the Head Office. 4) List three functions of a wholesaler breaking the bulk provide variety of goods offer delivery advertise channel of communication bj Explain two reasons for the elimination of a wholesaler. ig (1) as they have enough capital to buy directly from Growth of large scale reta manufactures. Use of mail order firms(1) who receive orders directly from customers(1) Perishable or technical goods are sold (1) which do not need a long chain(1) c) Explain two features of a chain store consist of a number of branches(1) scattered all over the country(1) Branches are controlled from the head office(1) where major decisions are taken Branches have same name and similar shop fronts(1) and easily recognised by customers(2) d) Evaluated the use of self service by the supermarkets,