™

Cambridge IGCSE

BUSINESS STUDIES 0450/13

*6660195349*

Paper 1 Short Answer and Data Response May/June 2022

1 hour 30 minutes

You must answer on the question paper.

No additional materials are needed.

INSTRUCTIONS
• Answer all questions.
• Use a black or dark blue pen. You may use an HB pencil for any diagrams or graphs.
• Write your name, centre number and candidate number in the boxes at the top of the page.
• Write your answer to each question in the space provided.
• Do not use an erasable pen or correction fluid.
• Do not write on any bar codes.
• You may use a calculator.

INFORMATION
• The total mark for this paper is 80.
• The number of marks for each question or part question is shown in brackets [ ].

This document has 12 pages. Any blank pages are indicated.

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1 MTD manufactures specialist cleaning products including soap. Batch production is used. The
business uses just-in-time inventory control. MTD took 18 months to develop its latest environmentally
friendly cleaning product. The Marketing Manager has to decide on the packaging and method of
promotion for this new product. She said: ‘All our stakeholders, including pressure groups, are
important. MTD wants to contribute to sustainable development.’

(a) Define ‘pressure group’.

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(b) Identify two features of batch production.

Feature 1: .........................................................................................................................

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Feature 2: .........................................................................................................................

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(c) Outline two factors MTD should consider when deciding on the packaging for its new product.

Factor 1: ...........................................................................................................................

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(d) Explain two possible advantages to MTD of using just-in-time inventory control.

Advantage 1: ....................................................................................................................

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Explanation: ......................................................................................................................

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Advantage 2: ....................................................................................................................

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Explanation: ......................................................................................................................

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(e) Do you think using social media is the best way for a business to promote a new product?
Justify your answer.

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2 TJM is a private limited company. It is a food retailer and has 450 shops. In 2021 TJM’s revenue
increased by $500 million. The Finance Director is analysing TJM’s financial statements. An extract
is shown in Table 2.1. The directors are planning to expand TJM by opening 20 new shops. TJM
will have to carry out a recruitment and selection process for 400 new employees.

Table 2.1
Extract from TJM’s financial statements for 2021 ($m)

Non-current assets 400

Current assets 300

Current liabilities 240

Profit for the year 200

(a) Define ‘revenue’.

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(b) Calculate working capital. Show your working.

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(c) Outline two advantages of TJM being a private limited company.

Advantage 1: ....................................................................................................................

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Advantage 2: ....................................................................................................................

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(d) Explain two possible reasons why profit might be important to TJM.

Reason 1: .........................................................................................................................

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Explanation: ......................................................................................................................

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Reason 2: .........................................................................................................................

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(e) Do you think an interview is the best way for a large business to select new employees? Justify
your answer.

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3 Gareth is planning to start a car washing business using government support. He is analysing
market research data to help him make important decisions about his business. Extracts from this
data are shown in Figure 3.1 and Figure 3.2. Gareth said: ‘I will need to set business objectives.’
He plans to keep his business small. Gareth is worried about the possible effects of higher taxes.

(a) Identify two reasons why businesses need objectives.

Reason 1: .........................................................................................................................

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(b) Identify two possible reasons why an owner might want their business to remain small.

Reason 1: .........................................................................................................................

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(c) Outline two ways higher taxes might affect Gareth’s business.

Way 1: ...............................................................................................................................

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(d) Explain how the data shown in Figure 3.1 and Figure 3.2 could be useful to Gareth.

Figure 3.1: ........................................................................................................................

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Figure 3.2: ........................................................................................................................

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(e) Do you think offering financial help, such as grants, is the best way for a government to support
business start-ups? Justify your answer.

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4 BCZ is a multinational company which operates in 12 countries. It manufactures cement, a building

material used by construction companies, so quality assurance is important. Making cement creates
external costs. One of BCZ’s factories is located in country X. The government of country X plans
to introduce new legal controls that will reduce the maximum number of working hours from 45 to
35 hours per week.

(a) Define ‘external cost’.

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(b) State two responsibilities of a director.

Responsibility 1: ...............................................................................................................

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Responsibility 2: ...............................................................................................................

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(c) Identify four potential benefits to a country’s economy of a multinational company locating
there.

Benefit 1: ..........................................................................................................................

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Benefit 2: ..........................................................................................................................

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(d) Explain one possible effect on BCZ and one possible effect on its employees of the new legal
controls that will reduce the maximum number of working hours.

Effect on BCZ: ..................................................................................................................

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Explanation: ......................................................................................................................

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Effect on BCZ’s employees: .............................................................................................

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(e) Do you think it is better for a large manufacturer to use quality assurance rather than quality
control? Justify your answer.

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