CBSE Sample Papers for Class 12 Business Studies Paper 6 are part of CBSE Sample Papers for Class 12 Business Studies Here we have given CBSE Sample Papers for Class 12 Business Studies Paper 6.
CBSE Sample Papers for Class 12 Business Studies Paper 6
Board | CBSE |
Class | XII |
Subject | Business Studies |
Sample Paper Set | Paper 6 |
Category | CBSE Sample Papers |
Students who are going to appear for CBSE Class 12 Examinations are advised to practice the CBSE sample papers given here which is designed as per the latest Syllabus and marking scheme as prescribed by the CBSE is given here. Paper 6 of Solved CBSE Sample Papers for Class 12 Business Studies is given below with free PDF download solutions.
Time: 3 Hours
Maximum Marks: 80
General Instructions
(i) Answer to questions carrying 1 mark may be from one word to one sentence.
(ii) Answer to questions carrying 3 marks may have about 50 to 75 words.
(iii) Answer to questions carrying 4 – 5 marks may have about 150 words.
(iv) Answer to questions carrying 6 marks may have about 200 words.
(v) Attempt all the parts of a question together.
Questions
Question 1:
Define decentralisation.
Question 2:
Give the meaning of method as a type of plan.
Question 3:
Saurabh decided to start a chocolates manufacturing business. He set the target of earning 10% profit on sales in the first year. As a good businessman, he was concerned about the future of the business, which was uncertain. He gathered information that the demand for chocolates is increasing day-by-day. He used this information as the base for future planning and shared it with his team. On the basis of the gathered information, he scheduled a meeting in the following week to find innovative ways to achieve the objectives.
List the first two steps, which have been followed by Saurabh that are related to the process of one of the functions of management.
Question 4:
In the paint industry, various raw materials are mixed in different proportions with petroleum for manufacturing different kinds of paints. One specific raw material is not readily and regularly available to the paint manufacturing companies. Bonier Paints Company is also facing this problem and because of this there is a time lag between placing the order and the actual receipt of the material. But, once it receives the raw materials, it takes less time in converting it into finished goods.
Identify the factor affecting the working capital reguirements of this industry.
Question 5:
An investor wanted to invest ₹20,000 in treasury bills for a period of 91 days. When he approached the Reserve Bank of India for this purpose, he came to know that it was not possible. Identify the reason why the investor could not invest in the treasury bill.
Question 6:
Why is the understanding of marketing philosophies important?
Question 7:
Give the Constitution of the District Consumer Disputes Redressal Forum under the Consumer Protection Act, 1986.
Question 8:
“Buy one get one free” is printed on the label of the package of a mosquito repellant. State the labelling function being performed by this statement.
Question 9:
Differentiate between formal and informal organisation on the basis of
- Origin
- Authority
- Flow of communication
Question 10:
State the steps in the selection procedure, after the employment interview and before the job offer.
Question 11:
Sandhya is a successful manager at Manisons Enterprises. She has a team of twelve people working under her. She encouraged them to set their own objectives and take decisions. She respects their opinions and supports them, so that they can perform their duties and accomplish organisational objectives. To manage and exercise effective control she uses forces within the group. As an intelligent manager, at times, she also, makes use of positive aspects of informal communication. This way, she is able to unify diverse interests and ensure that targets are met.
- There are many theories and styles of influencing people’s behaviour. Identify the style used by Sandhya which is based on the use of authority.
- State two positive aspects of the communication discussed above, which Sandhya is using as an intelligent manager.
Question 12:
The Return on Investment (ROI) of a company ranges between 10% to 12% for the past three years. To finance its future fixed capital needs, it has the following options for borrowing debt.
Option A : Rate of interest 9%;
Option B : Rate of interest 13% Which source of debt, Option A or Option B, is better? Give reason in support of your answer. Also state the concept being used in taking the decision.
Question 13:
Explain briefly any two points of importance of consumer protection from the point of view of business.
Question 14:
Aradhana and Gandharv are heads of two different departments in Yumco Ltd. They are efficient managers and are able to motivate the employees of their respective departments to improve performance. However, their drive to excel in their own sphere of activity instead of giving emphasis on objectives of the enterprise has hindered the
interaction between the departments that Aradhana and Gandharv are heading. Often there are inter-departmental conflicts and they have become incompatible. This has proved to the harmful in the fulfilment of the organisational objectives. The situation has deteriorated to such an extent that the CEO of Yumco Ltd has hired a consultant, Rashmi, to resolve the problem after studying the situation closely, Rashmi found that the problem has arisen due to inflexibility and a narrow perspective on the part of both Aradhana and Gandharv. She is of the view that this situation is a result of the type of organisational structure Yumco Ltd has adopted.
From the above information, identify the organisational structure adopted by Yumco Ltd and state any three advantages of the structure so identified.
Question 15:
In 2015, Naveen left his luxurious life in Mumbai, where he worked as a manager for Blue Birds Ltd. He shifted to Begampur, Chhattisgarh to fulfil his grandmother’s dream of converting their 25 acre ancestral land into a fertile farm. For this, he set out specific goals along with the activities to be performed to achieve the goals.
Every activity was a challenge since he was clueless about farming. He learnt every activity from filling the land to sowing the seeds. To aid farmers, he launched his own company Innovative Agriculture Solutions Pvt Ltd.
It was difficult initially as no one trusted an urban youth telling farmers about farming. But when everything was discussed in detail, the farmers started taking interest. He wanted to ensure that the future events meet effectively the best interests of the company. Through sales forecasting, he prepared an annual plan for production and sales.
He also found that the farmers grew only paddy, which was an activity of 3 to 4 months and the land remained idle for the rest 8 to 9 months of the year. He not only identified but evaluated various alternatives through which the farms could be utilised for the remaining months of the year. Through correct foresight and logical and systematic thinking based on analysis of all facts, all alternatives were examined and evaluated. He presented a plan to the farmers, where after harvesting paddy, vegetables could be grown.
The above case highlights the features of one of the functions of management. By quoting lines from the above, identify and explain these features.
Question 16:
Explain any four points of importance of the controlling function of management.
Question 17:
Ram Murthy, the CEO of Goodcare Hospitals, a leading chain of hosiptals, decided to reward the good work of the doctors of his organisation. For this he instituted two running trophies. A Healthcare Achievers Trophy to acknowledge and appreciate the tireless efforts of the doctors who rendered selfless services to the patients and another Beti Bachao Trophy to recognise the outstanding work done by the doctors in saving the girl child.
The CEO also wanted to improve the health services in rural areas all over the country. He decided that all doctors must work in rural areas for at least six months. He also decided that the paramedical staff should be employed locally.
- Identify the incentive provided by Goodcare Hospitals to its doctors through running trophies.
- Which need of the doctors will be satisfied through the incentive identified in part (1) State?
- State any two values that the CEO of Goodcare Hospitals is trying to communicate to the society.
Question 18:
State the protective functions of Securities and Exchange Board of India (SEBI).
Question 19:
Sumit purchased an ISI marked washing machine of a famous brand MG from TG Electronics Ltd. The shopkeeper asked him to wait for two days for installation of the machine. His friend, Vivek, was very fond of experimenting with new electronic products. He told Sumit that there is no need to wait for the company’s representative to install the machine and that he could do it. So, both of them installed the machine without following the manufacturer’s instructions. Initially, the machine worked effectively and the wash was good. But after two days, the machine started stopping in between the wash cycle. Sumit and Vivek tried their best to start the machine but failed in their efforts. Sumit, therefore, approached TG Electronics Ltd, which refused to provide any service on the plea that the installation of the machine was not done by the company.
- State the responsibility which Sumit had to fulfil as an aware consumer to get the services of the company.
- Explain briefly any two rights which Sumit could have exercised had he fulfilled his responsibility identified in part (1) .
Question 20:
What is meant by coordination? State its any four features.
Question 21:
Konark Ltd is an electronic goods manufacturing enterprise situated in Shivpuri, Madhya Pradesh. It is earning a very low revenue in comparison to a competing electronic goods manufacturing enterprise, Nova Ltd situated in Mumbai. Both Konark’s and Nova’s operations are affected directly by the investors, customers, competitors and suppliers, which are unique to their respective locations. In addition to this, individuals firms of this field are affected indirectly by the factors like the money supply in the economy, composition of the families, the technological changes, etc.
- Identify and state the feature of the concept discussed in the above paragraph.
- Also state any four points of importance of this concept.
Question 22:
After acquiring the necessary knowledge and skills on starting an Aloevera Farm, Ashok wanted to be the leading manufacturer of aloevera products worldwide. He observed that the products were expensive as the demand of the products was more than the supply. He was also keen to promote methods and practices that were economically viable, environmentally sound and at the same time protecting public health. Ashok’s main consideration was about the amount of money paid by the consumers in consideration of the purchase of aloevera product. He also thought that competitors prices and their anticipated reactions must also be considered for this.
After gathering and analysing information and doing correct marketing planning, he came to know that the consumers compare the value of a product to the value of money they are required to pay. The consumers will be ready to buy a product when they perceived that the value of the product is at least equal to the value of money which they would pay. Since he was entering into a new market, he felt that he may not be able to cover all costs. He knew that in the long run the business will not be able to survive unless all costs are covered in addition to a minimum profit.
He examined the quality and features of the products of the competitors and the anticipated reactions of the consumers. Considering the same he decided to add some unique features to the packaging and also decided to provide free home delivery of the products.
The above case relates to a concept which is considered to be an effective competitive marketing weapon. In conditions of perfect competition, most of the firms compete with each other on this concept in the marketing of goods and services.
- Identify the concept.
- Explain briefly any four factors discussed in the above case related to the concept so identified.
Question 23:
Karan Nath took over D North Motor Company from his ailing father three months ago. In the past, the company was not performing well. Karan was determined to improve the company’s performance. He observed that the methods of production as well as selection of employees in the company were not scientific. He believed that there was only one best method to maximise efficiency. He also felt that once the method is developed, the workers of the company should be trained to learn that best method.
He asked the production manager to develop the best method and carry out the necessary training. The production manager developed this method using several parameters right from deciding the sequence of operations, place for men, machines and raw materials till the delivery of the product to the customers. This method was implemented throughout the organisation. It helped in increasing the output, improving the quality and reducing the cost and wastage. Identify and explain the principles and the technique of scientific management followed by the production manager in the above case.
Question 24:
Moga Industries Ltd approached a well established university in the city of Madurai to recruit qualified personnel for various technical and professional jobs. They selected Tanya, Ritu, Garima and Chetan for various vacancies in the organisation. After the selection and placement, Moga Industries Ltd felt the need to increase the skills and abilities and the development of positive attitude of the employees to perform their specific jobs better. The company also realised that learning new skills would improve the job performance of the employees. Hence, the company decided to take action for the same.
- Name the step of the staffing process regarding which the company decided to take action.
- State the benefits of the action to Moga Industries Ltd
Question 25:
Explain briefly any four factors affecting the fixed capital requirements of an organisation.
Answers
Answer 1:
Decentralisation of authority means systematic dispersal of authority among all departments and at all levels of management except such authority which needs to be exercised at top or high level.
Answer 2:
Method as a type of plan provides the prescribed ways or manner, in which a task has to be performed considering the objectives. They are formalised and standardised ways of accomplishing repetitive and routine jobs, thus, are considered under the standing plan.
Answer 3:
The function of management referred here is planning.
The first two steps of planning followed by Saurabh are :
- Setting objectives
- Developing premises
Answer 4:
The factor affecting working capital referred here is availability of raw materials.
Answer 5:
The investor cannot invest in treasury bills because it is available in the denominations of ₹25,000 and its multiples only.
Answer 6:
An understanding of Marketing Philosophies is important because it helps us to understand how the concept of marketing has evolved over a period of time.
Answer 7:
Each District Consumer Disputes Redressal Forum consists of a chairman and two members appointed by the State Government, one of whom should be a woman.
Answer 8:
The labelling function performed here is it helps in promotion of products
Answer 9:
Difference between formal and informal organisation are:
Basis | Formal Organisation | Informal Organisation |
Origin | It is deliberately designed by the top management. | It originates from within the formal organisation due to interaction among employees. |
Authority | Authority flows through scalar chain from top to bottom. | There are no standard lines/chain for flow of authority. |
Flow of communication | Communication takes place through the scalar chain. | Communication is free and independent. |
Answer 10:
Reference and Background Checks Many employers request names, addresses and telephone numbers of references for the purpose of verifying information and gaining additional information of an applicant. These references can be teachers, friends, previous employers, relatives, etc who can give additional information about the candidate.
Selection Decision The final selection decision has to be made from the candidates, who pass the tests, interviews and reference checks. The views of the concerned manager will be generally considered in the final selection, because he is responsible for the performance of the new employee.
Medical Examination After the selection decision and before the job offer, the candidate is required to undergo a medical fitness test. The job offer is given to the candidate, only if the candidate is physically and mentally fit for the job.
Answer 11:
- The style of leadership used by Sandhya is democratic leadership.
A democratic leader takes decisions after consultation and encourages the participation of subordinates. This leadership style is more common and popular, as it ensures achievement of goals when they are set with the acceptance of the subordinates themselves. - Two positive effects of informal communication are :
- Prescribed lines of communication are not followed. Thus, it facilitates quick feedback and spreads information faster.
- It provides a sense of belongingness and gives due respect to social and psychological needs.
Answer 12:
The company should use Option A as in this case, the Return on Investment (10% to 12%) will be more than the cost of Debt (9%).
The concept being used in the above case is trading on equity. The use of debt along with equity increases Earnings Per Share (EPS). This use of fixed financial charge i.e. interest, increases the profit earned by shareholders. This concept is known as trading on equity.
If the company opts for Option A, it will lead to favourable trading on equity as in this case,
ROI > COD, where
ROI – Return on Investment (10% to 12%); COD – Cost of Debt (9%)
Answer 13:
Two points of importance of consumer protection from the point of view of business are :
- Long-term Interest of Business Customer is the foundation of business. Satisfied consumers not only bring repeated sales but also give positive feedback about the product, which help to increase the customer base of business.
- Business Uses Society’s Resources Business firms use resources that belong to the society such as manpower, mineral resources, capital, etc.
Therefore, it is the responsibility of businesses to convert these resources into useful goods and services for the welfare of society.
Answer 14:
The organisational structure adopted by Yumco Ltd is functional organisational structure. Functional structure has the following advantages:
- It leads to occupational specialisation, since emphasis is placed on specific functions and repeated performance leading to efficient functioning.
- It leads to minimal duplication of efforts, which results in economies of scale and lower costs.
- It makes training of employees easier-as the focus is only on a limited range of skills.
Answer 15:
Planning is the function of management referred in this case.
(i) “For this, he set this goals.” This line indicates the following feature of planning :
Planning Focuses on Achieving Objectives Every organisation has a set of goals to be achieved. Planning involves setting goals and determining the most economical and viable course of action to achieve the predetermined goals. Thus, planning is purposeful.
(ii) “He not only the year.” This, line indicates the following feature of planning:
Planning involves Decision-making Planning is essentially the process of choosing among various alternatives. So, in order to make an effective choice, examination and evaluation of each alternative is necessary. Thus, it is concerned with decision-making.
(iii) “Through correct evaluated.” This line indicates the following feature of planning :
Planning is a Mental Exercise It is a mental exercise as it requires creativity, imagination and higher thinking skills with sound judgement. It is an intellectual activity of thinking rather than doing. It requires logical and systematic thinking rather than guess work or wishful thinking.
(iv) “He wanted of the company.” This line indicates the following feature of planning:
Planning is Futuristic Planning is a process of looking ahead. It is looking into the future before the situation actually occurs. It deals with deciding future course of actions that have not taken place yet. Hence, it is termed as futuristic in approach.
Answer 16:
Four points of importance of the controlling function of management are:
- Accomplishing Organisational Goals It measures progress towards the organisational goals and find out deviations. In the absence of control system, activities may not be carried out according to plans. Thus, we can say, it guides the organisation and keeps it on the right track, so that it can attain its goals.
- Judging Accuracy of Standards Through an effective control system, managers can easily judge the accuracy of standards. It also keeps a careful check on the changes taking place in the organisation and in the environment, which facilitates the review of standards, in the light of such changes.
- Making Efficient Use of Resources By exercising control, a manager seeks to reduce wastage and spoilage of resources. Each activity is performed in accordance with predetermined standards and norms, which helps in effective and efficient utilisation of resources.
- Improving Employees Motivation It helps employees in realising, what they are expected to do and what are the standards of performance, on the basis of which they are appraised. This motivates them to perform better.
Answer 17:
- The incentive provided by Goodcare Hospitals is employee recognition programme which is a non-financial incentive to motivate the employees.
- Social and esteem needs are satisfied by using the incentive.
- Two values that the CEO of Goodcare Hospitals is trying to communicate are :
- Remove sex discrimination and saving the girl child.
- Concern for health issues in rural areas.
Answer 18:
The protective functions of Securities and Exchange Board of India (SEBI) are :
- Prohibition of fraudulent and unfair trade practices.
- Controlling insider trading and imposing penalties for such practices.
- Undertaking steps for investor protection.
- Promotion of fair practices and code of conduct in securities market.
Answer 19:
- As an aware consumer, the responsibility that Sumit should have followed is following the manufacturer’s instructions and user manuals carefully before using the product for safety „ purposes.
- If Sumit had fulfilled his responsibility, then he could have enjoyed the following rights :
- Right to be Heard Under this right, a consumer has the right to file a complaint under appropriate forums established by the government, in case of any grievance or dissatisfaction.
- Right to Seek Redressal Under this right, a consumer has the right to seek redressal and compensation in case of any exploitation. The Consumer Protection Act provides for compensation in various forms such as replacement of product, cash compensation and repair/removal of defects amoung others.
Answer 20:
Coordination is a process through which harmony is established among different activities of an
organisation. Coordination involves synchronisation of individual efforts towards the accomplishment of group goals.
Four features of coordination are:
- Integrates Group Efforts Coordination is always required where a group of people work towards a common goal. It binds all diverse interests into purposeful work activity. It ensures that the group efforts are combined to attain the organisational goal.
- Ensures Unity of Action The purpose of coordination is to unite the efforts of every individual, departments and levels for the realisation of common organisational goals. It leads to action of all in one common direction.
- Continuous Process Coordination is something, which is required at every step and in every activity of a business. It begins with planning and can be felt till controlling.
- All Pervasive Coordination is pervasive as it is required at all levels, departments and functions of management. It is applicable in all formS of organisation, whether, economic, social, legal, poltical, business or non-business organisation.
Answer 21:
- The concept discussed here is business environment and the feature is specific and general forces.
Business environment includes both specific and general forces. General forces are economic, social, political, legal and technological conditions, which affect all the enterprises indirectly. Specific forces are investors, customers, competitors and suppliers that affect individual enterprises directly. - Four points of importance of this concept are :
- It Enables the Firm to Identify Opportunities and Get the First Mover Advantage Opportunities are the positive trends that help firms to grow. A good knowledge of business environment helps a manager to identify such opportunities earlier to take its benefit, rather than losing it to other competing enterprises.
e.g. Maruti Udyog was the first automobile company in India to recognise the opportunity to develop small cars, due to which, it is still one of the market leaders in that segment. - It Helps the Firm to Identify Threats and Early Warning Signals Threats refer to the negative trends, which will hinder the performance of the enterprise. The businessmen, who are able to scan and understand the business environment on time get a warning signal to deal with such negative changes.
- It Helps in Tapping Useful Resources Environment is a source of various resources for business like finance, machinery, raw materials, etc. Contrary to this, business enterprise supplies goods and services to the society in the form of taxes, products, return on investment, etc. A good understanding of environment helps the firm to convert such resources into output required by the environment and society.
- It Helps in Coping With Rapid Changes Business environment is fast changing due to turbulent market conditions, more demanding customers, changing technology and increasing global competition. In order to cope up with such changes and derive benefit from them, managers must examine their environment and develop suitable action.
- It Enables the Firm to Identify Opportunities and Get the First Mover Advantage Opportunities are the positive trends that help firms to grow. A good knowledge of business environment helps a manager to identify such opportunities earlier to take its benefit, rather than losing it to other competing enterprises.
Answer 22:
- Pricing It refers to the process of determining the price of a product. Price of a product refers to the amount of money that the customer has to pay to obtain a product from the market. Pricing is considered as a regulator of demand of a product, because, when the price of the product is increased, demand falls, and vice-versa.
Under perfect competition, most firms compete with each other on the basis of this factor. Therefore, firms give great importance to the fixation of price for their goods and services.- (a) Product Cost The total cost of product includes production, selling and distribution costs.
In the long run the firm strives to cover all their costs. The cost sets the minimum level or floor price for a product. In addition to that firm aims to earn profit margin over and above the costs. - (b) The Utility and Demand It is necessary to anticipate the utility and demand of a product, while fixing the price, as if a product is offering higher utility, one can easily charge high price from the customer. Whereas, if utility is low, one cannot charge high price for such products. On the other hand, if the demand is elastic, price should be set at a lower level and if the demand is less elastic or inelastic price can be set at a higher level.
- (c) Extent of Competition in the Market The price of a product can be set upto the higher limit, if the extent of competition is low in the market, and vice-versa. Competitors’ price, their reactions, their product, quality and features must be considered before fixing the price.
- (d) Government and Legal Regulations To protect the interest of general public, the government has all the rights to control the prices of various products and services by including the products in the category of essential commodities such as drugs, some food items, LPG, etc. With government intervention, there can be a check on the activity of monopolist as they cannot charge unfairly high price for essential commodities.
- (a) Product Cost The total cost of product includes production, selling and distribution costs.
Answer 23:
The principles of scientific management followed in the above case are :
- Science not Rule of Thumb According to Taylor, each job should be performed in an organisation as per the scientific approach, as there is always one best method to maximise efficiency. This method can be developed through study and analysis. Selecting one best method for activities can result in saving time, effort, money and resources.
- Development of Each and Every Person to his/her Greatest Efficiency According to this principle, “Each person should be scientifically selected and then assigned work as per their specialisation and in any case, if training is required, then impart training to them as efficient employees would produce more and earn more.” Worker training is essential to learn the best method developed as per the scientific approach. This would ensure greatest efficiency for both, workers and the organisation.
The techniques of scientific management followed in this case are :
- Standardisation It is the process of setting standards for every business activity, process, raw materials, time, machinery and methods, to achieve efficiency. Standardisation of product implies that the size, design, quality, shape, etc of the product should meet the requirements and tastes of consumers. Simplification means eliminating superfluous sizes, varieties and dimensions. Its aim is to:
- Eliminate unnecessary diversity of products and thereby reduce costs.
- Help in achieving economy in the use of required machines and tools.
- Method Study This technique of scientific management is conducted to find out the one best method or way of performing a particular task. The objective of this study is to minimise the cost of production and maximise the quality and satisfaction of the customer.
Answer 24:
- The step in the staffing process discussed here is training and development.
- The.benefits of training and development to an organisation are as follows:
- Training is a systematic learning, always better than hit and trial methods, which leads to wastage of efforts and money.
- It enhances employee productivity both in terms of quantity and quality and leading to higher profits.
- Training equips the future manager, who can takeover in case of emergency.
- Training increases employee morale, reduces absenteeism and employee turnover.
- It helps in obtaining effective response to fast changing environment.
Answer 25:
The main factors affecting the requirement of fixed capital are as follows:
- Nature of Business The type of business has a bearing upon the fixed capital requirements, e.g. a trading concern needs lower investment in fixed assets compared with a manufacturing organisation, since it does not require to purchase plant and machinery, etc.
- scale of Operations A larger organisation operating at a larger scale needs higher investment in fixed assets as compared to a small organisation.
- Choice of Technique Some organisations are capital intensive, whereas, others are labour intensive. A capital intensive organisation requires higher investment in plant and machinery as it relies less on manual labour. The requirement of fixed capital for such organisations would be higher. Labour intensive organisations on the other hand require less investment in fixed assets.
- Technology Upgradation In certain industries, assets become obsolete sooner. Consequently, their replacements become due faster. Higher investment in fixed assets may, therefore, be required in such cases, e.g. computers become obsolete faster and are replaced much sooner than say, furniture.
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