GCE A LEVEL MARKING SCHEME - Revision World

GCE A LEVEL MARKING SCHEMESUMMER 2018A LEVELBUSINESS – COMPONENT 1A510U10-1 WJEC CBAC Ltd.

INTRODUCTIONThis marking scheme was used by WJEC for the 2018 examination. It was finalised afterdetailed discussion at the examiners' conference by all the examiners involved in theassessment. The conference was held shortly after the paper was taken so that referencecould be made to the full range of candidates' responses, with photocopied scripts formingthe basis of discussion. The aim of the conference was to ensure that the marking schemewas interpreted and applied in the same way by all examiners.It is hoped that this information will be of assistance to centres but it is recognised at thesame time that, without the benefit of participation in the examiners' conference, teachersmay have different views on certain matters of detail or interpretation.WJEC regrets that it cannot enter into any discussion or correspondence about this markingscheme.GENERAL MARKING GUIDANCEPositive MarkingIt should be remembered that learners are writing under examination conditions and creditshould be given for what the learner writes, rather than adopting the approach of penalisinghim/her for any omissions. It should be possible for a very good response to achieve fullmarks and a very poor one to achieve zero marks. Marks should not be deducted for a lessthan perfect answer if it satisfies the criteria of the mark scheme, nor should marks be addedas a consolation where they are not merited.For each question there is a list of indicative content which suggest the range of businessconcepts, theory, issues and arguments which might be included in learners’ answers. Thisis not intended to be exhaustive and learners do not have to include all the indicative contentto reach the highest level of the mark scheme.The level based mark schemes sub-divide the total mark to allocate to individual assessmentobjectives. These are shown in bands in the mark scheme. For each assessment objective adescriptor will indicate the different skills and qualities at the appropriate level. Learner’sresponses to questions are assessed against the relevant individual assessment objectivesand they may achieve different bands within a single question. A mark will be awarded foreach assessment objective targeted in the question and then totalled to give an overall markfor the question. WJEC CBAC Ltd.

EDUQAS A LEVEL - COMPONENT 1BUSINESS OPPORTUNITIES AND FUNCTIONSSUMMER 2018 MARK SCHEMESECTION AQ.1TotalGive one example of a business using batch production and describetwo benefits of this method of production.Award 1 mark for an appropriate example.AO1: 1 markIndicative content:A baker making loaves of bread; a clothing manufacturer making batches of aparticular garment; a paint manufacturer making batches of a particular colourpaint.Credit any valid exampleAward up to 2 marks for describing the benefits of batch productionAO1: 2 marksIndicative content:Batch production allows groups of items to be made togetherThis can be cheaper than producing by job production (lower unit costs)Quality should be more or less consistentProduction can be faster than job productionProvides more choice for customersLower capital costs than flow productionAny other valid point.1 WJEC CBAC Ltd.3

Q.2 (a)TotalOutline the meaning of the term external economies of scale.2Award 1 mark for each valid point that explains external economies of scale.AO1: 2 marksIndicative content:External economies of scale occur outside of a business (1) and benefit thewhole industry (1) resulting in lower average unit costs (1).Reference to lower average unit costs (resulting from external economies ofscale) needed for second mark.2 (b)Suggest two ways in which an IT company can benefit from externaleconomies of scale.Award up to 2 marks for each benefit correctly explained.AO1: 2 marksAward up to 2 marks for application to an IT company.AO2: 2 marksIndicative content:There may be numerous suppliers, which means that a business will find iteasy to obtain the necessary supplies of computer equipment.There is likely to be a pool of skilled labour so that a business will find it easyto recruit well-trained staff with the necessary programming skills.There may be a college or university nearby that specialises in teachingrelevant IT skills.There may be appropriate infrastructure, e.g. good transport links,communications, which make it easier for goods to be transported.There may be a wide customer base, as customers will know that this is theplace to go to purchase what they are looking for.Any other valid suggestion and application2 WJEC CBAC Ltd.4

Q.3 (a)TotalUsing the diagram:(i)AO2: 3 marksState the lead timeOne week(ii)[1]Identify the minimum stock level100 or 100 rolls(iii)3[1]Calculate the reorder quantity in weeks 1 to 10400 or 400 rolls[1]Allow 2000 (total reorder quantity over 10 week period) [1]Allow 200 (average weekly reorder quantity) [1]NB: ‘rolls’ not needed for mark to be credited3 (b)With reference to the diagram, explain what happened during week 11and explain its possible cause.Award 1 mark for using the diagram correctlyAO2: 1 markAward 1 mark for correct explanationAO3: 1 markIndicative content:In week 11 the company ran out of stock (stock levels fell to zero)This may have been because they had received more orders than expectedProduction may have been switched to some other product so that more stockwas used up than usualAny other valid explanation3 WJEC CBAC Ltd.2

3 (c)Explain why it is important for Twinkly Toys to carefully control its stock.AO1AO32 marks2 marks2 marks2 marksGood understanding of the importanceof controlling stockGood analysis of the reasons for controllingstock1 mark1 markBand21Limited understanding of theimportance of controlling stockLimited analysis of the reasons forcontrolling stock0 marks0[4]0 marksNo understanding of the importance ofcontrolling stockNo analysis of the reasons for controllingstockIndicative content:If a company has too much stock it will cost them money. This may cause cash flowproblems.If there is too much stock it might get damaged in the warehouse. Or there may be securityissues with the possibility of stock being stolen. Warehousing costs are likely to beexpensive.If there is too little stock a business will have to stop production, this will result in ordersbeing fulfilled late and customers getting angry and possibly switching to other suppliers.Stock may be controlled as part of JIT.Any other valid point4 WJEC CBAC Ltd.

4 (a)Identify one source of finance that would be suitable for Ella’s business and onesource of finance that would not be suitable, stating the reason why in eachcase.[4]Band2AO1AO22 marks2 marks2 marks2 marksThe learner identifies two sources offinance, one suitable and oneunsuitableThe learner fully applies the suitability ofboth sources of finance to Ella's business1 mark11 markThe learner identifies one source offinance, either one suitable or oneunsuitableThe learner attempts to apply the suitabilityof at least one source of finance to Ella'sbusiness0 marks00 marksNo appropriate/inappropriate sources offinance identifiedNo application to Ella's businessIndicative content:Suitable sources might include: borrowing from family and friends – this would not beexpensive and she could pay them back with interest when she started to make a profit fromthe new factory.She could take out a bank loan, this would be for a fixed period of time and could be at afixed rate of interest so that she would know exactly what she would have to pay back eachmonth.Ella could lease the equipment rather than buying it outright.Grants – if these are available to her, for instance from the local council.Crowd funding – it may be possible to raise money this way through social media in returnfor a share in the profitsUnsuitable sources might include: selling shares in her business, she is not a limitedcompany, so she is not able to do this.An overdraft – this is not really appropriate for a capital project as the costs are high and it islikely that she will not be able to pay it off in the short run, so the borrowing costs will beextortionate. Use of a credit card – the interest rates would be prohibitive.Sale of assets – it does not appear that her business at this stage has any assets that shecould dispose of.Venture capital – it is possible but unlikely that a venture capitalist would invest in a businessof this size.Mortgage – can be taken out to purchase the factoryDo not allow retained profit as Ella has already exhausted this source of finance.Any other valid suggestion5 WJEC CBAC Ltd.

Q.4 (b)TotalCalculate her breakeven output per month (show your workings).Award 1 mark for correct formula2AO1: 1 markBreakeven Fixed cost / (selling price – variable cost)Award 1 mark for correct answerAO2: 1 mark 1.15 – 0.65 1 800/ 0.50 3 600 or 3 600 units per monthIf correct answer is given in then allow 1 markAward 2 marks for correct answer without workings4 (c)Calculate her estimated profit or loss for next year.Award 1 mark for each correct calculation3AO2: 3 marksAward 2 marks for calculating contribution 50 000 x ( 1.15 - 0.65) 25,000Alternatively:Contribution Total Revenue – Total Variable Costs( 57 500 - 32 500) 25 000 [2 marks]Award 1 mark for calculating fixed costs (12 x 1 800) 25 000 - 21 600Alternatively:Total Revenue ( 50 000 x 1.15 57 500) [1 mark] – Total Variable Costs( 50 000 – 0.65 32 500) [1 mark] – Fixed Costs (12 x 1 800 21 600) 3 400Award 1 mark for calculating profit 3 400 profitIf correct answer is without sign then award 2 marksApply OFR where relevantAward 3 marks for correct answer without workings6 WJEC CBAC Ltd.