Please refer to Class 12 Business Studies Sample Paper Term 2 With Solutions Set A provided below. The Sample Papers for Class 12 Business Studies have been prepared based on the latest pattern issued by CBSE. Students should practice these guess papers for class 12 Business Studies to gain more practice and get better marks in examinations. The Term 2 Sample Papers for Business Studies Standard 12 will help you to understand the type of questions which can be asked in upcoming examinations.
Term 2 Sample Paper for Class 12 Business Studies With Solutions Set A
1. Owing to the increased workload after demonetization, the income tax employees of Gurgaon and Delhi region had urged the center to increase manpower of the IT department by filling up 35% vacancies which were lying vacant. As there were confirmed reports about misuse of bank accounts, foreign exchange mechanism, gold purchases and adoption of various other dubious means for investing the unaccounted cash. Identify and explain the function of management and its step of process being discussed in the above lines.
Answer: Staffing is the function of management which is being referred to in the above lines. The managerial function of staffing is concerned with obtaining and maintaining a satisfactory and satisfied workforce.
The step in the process of staffing which has already been carried out is estimating manpower requirements. It is the first step in the staffing process and is carried out with the help of workload analysis (assessment of the number and types of human resources necessary for performing of various jobs and accomplishment of organisational objectives) and work force analysis (assessment of the number and type available).
2. These days, the development of a country is also judged by its system of transferring finance from the sector where it is in surplus to the sector where it is needed most. To give strength to the economy, SEBI is undertaking measures to develop the capital market. In addition to this there is another market in which unsecured and short-term debt instruments are actively traded every day. These markets together help the savers and investors in directing the available funds into their most productive investment opportunity. Identify and explain the function being performed by the market in the above case.
Answer: Mobilisation of funds is the function being performed by the financial market in the above case.
Mobilisation of Funds:
A financial market facilitates the transfer of savings from savers to investors. It gives savers the choice of different investments and thus helps to channelise surplus funds into the most productive use.
3. Ambreesh runs an NGO under the name ‘Sakhi’ in Delhi. The organisation is engaged in offering employment to underprivileged people. The website of ‘Sakhi’ provides a link to a careers site wherein the people desirous of joining the NGO can use simple Job Search to find the right opportunity for themselves. The NGO also keeps a database of unsolicited applicants in its office so that job seekers may be notified of future opportunities when they arise. In context of the above case:
Identify the two sources of external recruitment being used by the NGO ‘Sakhi’ by quoting lines from the paragraph.
Answer: Recruitment is making people aware about the vacancy in the company and to persuade them to apply for the same.
The two sources of external recruitment being used by the NGO ‘Sakhi’ are as follows:
(a) Web Publishing:
“The website of ‘Sakhi’ provides a link to a careers site wherein the people desirous of joining the NGO can use simple Job Search to find the right opportunity for themselves”
(b) Casual Callers:
“The NGO also keeps a database of unsolicited applicants in its office so that job seekers may be notified of future opportunities when they arise.”
4. Adarsh is trying to reduce wastage of resources in his company. He is trying to do it in the best possible manner. He has set standards for performance of different types of activities and is doing his level best to perform according to these set standards to minimise wastage of resources. Things are not going to be over for him as he will have to look into other aspects too. He has set up a good monitoring system which helps him know how the employees are performing according to set standards and when the employees meet these standards they will be given incentives. He is hoping to pull out a good performance from his team this year. Identify the function of management and benefits of function of management which has been referred to in the given case.
Answer: The function of management which has been referred to in the above case is controlling. Controlling means ensuring that activities in an organisation are performed as per the plans.
The benefits of controlling highlighted in the above case are:
(a) Controlling helps in efficient utilisation of resources: He has set standards for performance of different types of activities and is doing his level best to perform according to these set standards to minimise wastage of resources.
(b) Controlling helps in improving employee motivation: He has set up a good monitoring system which helps him know how employees are performing according to set standards as when the employees meet these standards they will be given incentives
5. Aprajit works in an organisation. He is part of the organisation for last 20 years. During all these years inspite of his best performance in the organisation he hasn’t yet reached the post of Vice-President.
(a) Which need of Aprajit has been referred here?
(b) Mention the assumptions of Maslow’s theory.
Answer: (a) The Self-Actualisation need of Aprajit has been referred here. It is the highest level of need in the hierarchy. It refers to the drive to become what one is capable of becoming. These needs include growth, self-fulfillment and achievement of goals.
(b) Maslow’s theory is based on the following assumptions:
(i) People’s behaviour is based on their needs. Satisfaction of such needs influences their behaviour.
(ii) People’s needs are in hierarchical order, starting from basic needs to other higher level needs.
(iii) A satisfied need can no longer motivate a person; only next higher level need can motivate him.
(iv) A person moves to the next higher level of the hierarchy only.
6. State three importance of Supervision.
Enumerate few importance of Directing.
Answer: Importance of Supervision:
(a) A good supervisor acts as a guide, friend and philosopher to the workers.
(b) Supervisor acts as a link between workers and management.
(c) Supervisor plays a crucial role in maintaining group unity among workers placed under his control.
Importance of Directing:
(a) Directing integrates employees’ efforts in the organisation in such a way that it contributes to the organisational performance.
(b) Directing guides employees to fully realise their potential through effective communication, motivation and leadership.
(c) Directing facilitates introduction of needed changes in the organisation as it helps to reduce employees’ resistance and develop an environment which is conducive to introducing changes in the organisation.
7. List the types of working capital.
Answer: Working capital is classified into two types:
(a) Permanent Working Capital: The need for working capital or current assets fluctuates from time to time. However, to carry on day-to-day operations of the business without any obstacles, a certain minimum level of raw- materials, work-in-progress, finished goods and cash must be maintained on a continuous basis. The amount needed to maintain current assets on this minimum level is called permanent or regular working capital. The amount involved as permanent working capital has to be met from long-term sources of finance, e.g., capital, debentures, long-terms loans, etc.
(b) Temporary or Variable Working Capital: Any amount over and above the permanent level of working capital is called temporary, fluctuating, or variable working capital. Due to seasonal changes, the level of business activities higher than normal during some months of the year, and therefore, additional working capital will be required along with the permanent working capital.
It is so because during peak season, demand rises and more stock is to be maintained to meet the demand.
8. Sunita Ltd. is engaged in manufacturing Fan components. The target production is 300 units per day.
The company had been successfully attaining this target until two months ago. Over the last two months, it has been observed that daily production varies between 150-170 units.
Explain the procedure to be followed so that the actual production may come up to the target production.
Answer: The procedure to be followed so that the actual production may come up with the target production is as follows:
(a) Providing training to workers if the workers are not well versed with the production process.
(b) Improving the work environment if it is not conducive to efficient working.
(c) Ensuring timely availability of the raw materials and other equipment’s if they are not made available on time.
(d) Replacing the machinery if it is defective or has become obsolete.
9. Enumerate some responsibilities of a consumer.
Enumerate any five consumer rights given under Consumer Protection Act,1986.
Answer: Responsibilities of a Consumer are:
(a) Be aware about various goods and services available in the market.
(b) Buy only standardised goods and check for standardisation mark.
(c) Be aware about the risks associated with the products and services and use them prudently.
(d) Read the labels carefully.
(e) Assert yourself to ensure that you get a fair deal.
(f) Be honest in your dealings.
(g) Ask for a cash memo on purchase of goods or services.
(h) File a complaint in an appropriate consumer forum in a case of a shortcoming in the quality of goods purchased or services availed.
(i) Form consumer societies which would play an active part in educating consumers and safeguarding their interests.
Consumer rights given under Consumer Protection Act,1986 are:
(a) Right to Safety: The consumer has a right to be protected against goods and services which are hazardous to life and death.
For instance, electrical appliances which are manufactured with substandard products or do not confirm to the safety norms might cause serious injury.
Thus, consumers are educated that they should use electrical appliances which are ISI marked as this would be an assurance of such products meeting quality specifications.
(b) Right to be Informed: The consumer has a right to have complete information about the product he intends to buy including its ingredients, date of manufacture, price, quality, directions for use, etc.
It is because of this reason that the legal framework in India requires the manufactures to provide such information on the package and label of the product.
(c) Right to Choose: The consumer has the freedom to choose from a variety of products at competitive prices.
This implies that the marketers should offer a wide variety of products in terms of quality, brand,prices, size, etc. and allow the consumer to make a choice from amongst these.
(d) Right to seek Redressal: The consumer has a right to get relief in case the product or service falls short of his expectations. The Consumer Protection Act provides a number of reliefs to the consumers including replacement of the product, removal of defect in the product, compensation paid for any loss or injury suffered by the consumer, etc.
(e) Right to Consumer Education: The consumer has a right to acquire knowledge and to be a wellinformed consumer throughout life. He should be aware about his rights and the reliefs available to him in case of a product or service falling short of his expectations.
10. Discuss the functions of Financial Market.
Answer: Functions of financial markets are:
(a) Information dissemination: The main function of financial markets is to disseminate information about trading activity of financial instruments between financial intermediaries and investors as per regulatory norms that enables informed decision-making about their transactions.
(b) Facilities price recovery: Financial markets also facilitates price discovery that is the process used to determine current m arket prices of a financial instrument depending upon the demand and supply for those instruments.
(c) Provides liquidity: Financial markets provide liquidity by enabling a trading platform for investors who can invest their money in any type of instrument they desire.
(d) Mobilises savings: Financial markets boost people into utilising their savings into investments to obtain higher returns.
(e) Reducing the cost of transactions: Financial markets provide valuable information about securities being traded in the market. It helps to save time, effort and money that both buyers and sellers of a financial asset would have to otherwise spend to try and find each other
11. Neeraj, the director of a garment company, is planning to manufacture bags for the utilisation of waste material from one of his garment units. He has decided that this manufacturing unit will be set-up in a rural area of Uttar Pradesh where people have very few job opportunities and labour is available at very low rates. He also thought of giving equal opportunities to men and women.
For this, he wanted four different heads for sales, account, purchase and production. He gave an advertisement and shortlists ten candidates per post after conducting different selection tests.
Identify and state the next three steps for choosing the best candidate out of the candidates shortlisted.
Also identify two values which Neeraj wants to communicate to the society by setting up this manufacturing unit.
Answer: Selection is done in the third step, in which a prospective candidate is chosen from the pool of candidates.
It ensures that the organisation gets the best among the available and it also enhances the morale of the selected candidate. Preliminary screening and selection tests have been conducted.
The next three steps in the process of selection are:
(a) Employment interview: All applicants who qualify in selection tests are called for an interview.
Interview is the formal face to face oral conversation between the employer and the applicant.
(b) Reference and background checks: A candidate who is successful in the interview is required to give name and address of some references. The organisation checks the credibility of the candidate through reference checks
(c) Selection decision: A final decision has to be made about the selection among the candidates who have cleared the interviews and reference checks.
By setting up a manufacturing unit in the rural area of Uttar Pradesh, Neeraj wants to communicate the following values to the society:
(a) Manufacturing bags from the waste material will help in reducing pollutants from the environment and will also reduce wastage.
(b) Giving equal opportunities to men and women, will increase the standard of living of rural area labourers.
12. Saurabh is engaged in transport business and transports fruits and vegetables to different states. Stating the reason in support of your answer, identify the working capital requirements of Saurabh. Saurabh also wants to expand and diversify his transport business, explain any five factors that will affect his fixed capital requirements.
Organic Ltd. is a company engaged in production of organic food. Presently it sells its products through indirect channels of distribution. The company is planning to start its own show rooms and online portals. The financial manager suggested to use debt to invest in own showrooms and online portals.
Company plans to raise debt capital of ` 40 lakhs through a loan from ICICI bank at 10% Interest. The present capital base of the company is 9 lakhs equity shares of 10 each. The rate of tax is 30% .
In the context of above case –
Assuming expected rate of return same as current year, i.e., 15%, Do you think the decision to use debt is justified? Show your working clearly.
Answer: In the transportation business, lesser amount of working capital is required as Saurabh is engaged in service industry. A firm engaged in service industry needs less working capital.
(a) Lower investment is required to carry out the day-to-day operations.
(b) Lower investment require to maintain inventory, if any.
Factors that affect Fixed Capital Requirement are as follows:
(a) Growth prospects: Businessman wants to expand his business, in such a situation; company requires higher investment to meet the anticipated demand in future. Thus the requirement of fixed capital will be higher.
(b) Diversification: If the businessman diversify his business, this mean larger amount of fixed capital
is required. (c) Level of Collaboration: Sometimes, certain business organisations share each other’s facilities.
Collaboration reduces the level of investment in fixed assets for each one of the participating organisations.
(d) Technology Upgradation: In certain industries like transportation, assets become obsolete sooner.
Consequently, their replacements become due faster. Higher investment in fixed assets may, therefore, be required in such cases.
(e) Financing Alternatives: A developed financial market may provide leasing facilities as an alternative to outright purchase. When an asset is taken on lease, the firm pays lease rentals and uses it and firm need not to arrange huge sums required to purchase it. Availability of leasing facilities, thus, may
reduce the funds required to be invested in fixed assets.
Yes, the decision to raise debt is correct or justified as the EPS is more in case of Situation 2 in which the
company has raised the money through debt also
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