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CBSE Sample papers class XII business studies 4 -Answers

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CBSE Sample papers class XII business studies 4

Business Studies Class - XII (CBSE)
You are on questions of Set I

Time allowed : 3 hrs.
Maximum Marks:100

(i) This question paper is divided into four parts. Part-I carrying 50 marks is compulsory for all. Out of the remaining Parts viz.:II, C and C attempt any one part. Each part carries 50 marks.

(ii) All questions in Part-1 and the optional part (Part II or III or IV) are compulsory.

(iii) Marks are indicated against each question.

(iv ) Answers should be brief and to the point.

PART I
(PRINCIPLES AND FUNCTIONS OF MANAGEMENT)

Q 1 What is meant by management? (2 marks)

The word management defines "the universally applicable methods, techniques, guidelines to be used in the areas of production, sales and profit".

Q 2 Explain, in brief, the principle of parity of authority and responsibility.
(2 marks)

As per Fayol's General Management Theory, a management technique could be well applied in areas if it will follow parity of authority and responsibility. The rule suggests that if a person is given authority for an assignment, he should made equally responsible for the assignment or task he has assigned with an authority. The rule suggests that both the things are complimentary to each other and need good balance to get an assignment done at time.

Q 3 Give two functions of a supervisor. (2 marks)

This person is responsible to get check the functioning under administrative reorganization. His main assignment is to get the things done at time with allowed cost and without any discrepancies.

Q 4 Explain briefly the meaning of "organisation structure". (3 marks)

An organisation structure is the structure of an organization, its manpower setting/arrangement as per need and policy of the management. 

Q 5 State the main features of line and staff organisation. (3 marks)

A line organisation is a functional organisation, while a staff   organisation is an organisation under the functional organisation. A line organisation may restrict to the functions and always in horizontal direction,   while a staff organisation don't have any restriction and may move horizontal, vertical, diagonal.

Q 6 Differentiate between formal and informal organisation on the basis of formation, purpose, structure and communication. (4 marks)

 

Formal

Informal

Formation

Developed as per company policy

Informal formation

Purpose

To achieve economic plan and goal

To achieve social satisfaction

Structure

Official Organisation, formally structured

Emotional Organisation,

Communication

Proper channel of communication

No Proper channel

 

Q 7 "Management is the art of getting things done through other people." Explain the importance of management in the light of the statement.(5 marks)

"Management is the art of getting things done through other people", the statement defines management (It means resources and their optimum utilization through managing techniques).

Management is managing for optimum utilization of resources and caring  for every single rupee to be invested in the business, no doubt the main motto is this, but without managing and directing other people indirectly or directly involved with the business the management is not possible. So, "Management is the art of getting things done through other people".

Q 8 Briefly explain(a) Motion study, and (b) Esprit de corps. (5 marks)

Motion Study: Motion study is the study of movement of body while starting and completing (doing) a work. This study is to get the knowledge about sitting arrangement that can best suit to complete an assignment effectively at time with smoothening of the arrangement.

Esprit de corps (spirit of co-operation): there are 14 principles of Fayol's General Principles of Management. One of the principles is spirit of co-operation. It asks for cooperation in all areas of management activities, especially among persons to achieve the objectives of management.

Q 9 What is manpower planning? How will you assess the manpower requirement of a business enterprise? (5 marks)

Manpower Planning is planning for manpower resources need in an organisation, for immediate work/project, future work/project, and special targets.

The assessment could be done by:

Getting the information about change in target/level of activity, new target, new assignment, new obligation, emergency need and demand change.

Q 10 Explain briefly the various steps in the process of control.(5 marks)

• Defining Targets
• Defining Standards
• Measuring Performance
• Detecting Controls
• Remedial Actions and steps

Q 11 Describe briefly the various features of planning.
OR
Explain briefly the benefits of planning to an organisation. (6 marks)

Features of planning:

• Goal Orientation
• Primary Function
• Pervasive
• Forward looking
• Risk management
• Continuous process

Benefits of Planning:

It helps for achieving goal, Risk management, Proper direction, Coordination, Resource Management, decision making, Development and expansion and Control.

Q 12 What is meant by ‘communication'? Differentiate between oral and written communication.

OR
What is leadership? Discuss the importance of leadership in the management of a business organisation. (8 marks)

Communication is a technique to pass an information using certain media to an another person. An Oral communication is a verbal communication while a written communication is a communication in writing.

Oral Communication: through Phone, Personal interaction, whispering etc

Written Communication : Through draft, fax, letter, documents

Leadership: It is a unique style of a person/leader to manage the activities of an Organisation. It may get shown as personnel identity, etiquette, behavior and practice.

Leadership quality is an essential factor for a good manager, as a good leader always may work as a good manager, but a good manager may not be essentially a good leader. For an Organisation a manager has to manage all the activities and to go through the 5 main steps i.e. Planning, Organising, Staffing, Directing and Control. In a business Organisation, a manager has to manage all the above activities with man resources, and for all these leadership is a must.

Q 13 What is meant by the term "price mix"? (2 marks)

"Price Mix" is a pricing strategy for a mix of products with either same feature, function or use.

Q 14 State the role and responsibilities of a personal manager. (3 marks)

Keeping record of all data related to persons.

Q 15 Distinguish between training and development. (3 marks)

Training: relates to a person and make a person developed as per need, with training there is development, but without training there is no development.

Q 16 Explain briefly the objectives of financial management. (3 marks)

Objective of financial management is to provide optimum return to equity shareholders, maximum profit earning and optimum use  of assets.

Q 17 State any three effects of undercapitalisation on a company. (3 marks)

Undercapitalization is underutilization of assets of a company. The effects is not but as natural low earning, unsatisfied results, ploughing back of resource with no earning.

Q 18 Enumerate the qualities of a good salesman. (3 marks)

Attractive, Polite, Humble, Good contacts, good information provider, customer grip and reliable service with go getter attitude.

Q 19 How does performance appraisal help in taking different types of management decisions? (4 marks)

Performance appraisal helps:

Making performance report

Making package justifiable

Help a person to grow as per the report

Help a person to get trained as per the report's suggestion

Make a view about a person and his performance

Q 20 Which method of wage payment-time rate or piece rate-would you prefer in the following situations?
(a) When workers have no control over the rate of output?
(b) When work and work methods are of a standardised nature?
© When workers are to be remunerated on a group basis?
(d) When quality of output is more important than its quantity? (4 marks)

(a) Piece rate

(b)Time rate

(c) Piece rate

(d)Piece rate

Q 21You are the finance manager of a company. The Board of Directors have asked you to determine the working capital requirement for the company. State the factors that you would take into consideration while determining the requirement of working capital for the company. (5 marks)

We would have to consider current cash balance, movement in assets, movement  in liabilities, write offs and closing balance requirement.

Q 22 Explain briefly the factors that you will keep in mind while selected a suitable medium of advertisement. (5 marks)

Purpose of information, Cost Benefit Ratio, Confidentiality, Clients Preference.

 

Q 23 Explain ‘Financial Planning' and discuss the essentials of a sound financial plan. (7 marks)
OR
What meant by capital structure? What are the factors to be kept in mind while determining the capital structure of a company?

Financial Planning is planning for proper utilization of every single rupee of the business. A sound financial plan considers every aspects as to where to generate fund, by what mix, where to invest, how much to generate and invest, how best to use and considering implicit explicit costs and gains a business gains by management and plan of fund.

Capital structure is the combination of debt and equity in the financial structure of the company.

Factors to be considered:

• Current ratio
• Cost of raising fund
• Available Funds
• Market Repo
• Long run impact
• Leverage
• Legal Aspect
• Brokerage

Q 24 Explain "personal selling" and state the advantages of personal selling.
OR
"Advertising in unnecessary and wasteful." Do you agree with the statement? Give reasons for your answer. (8 marks)

Personal selling: It is selling directly to the customer, it is usually for sales promotion.

Advantages:

• Direct customer interaction
• Two way interaction
• Mostly for sales promotion
• Mostly for either very new product or old product with some promotion camp
• Usually gets arranged in  public places 

 

Advertising is unnecessary and wasteful: When advertising is just advertising and have no business objective it is unnecessary and wasteful. But if advertising have some proper objective and have certain good plan it is as good as a new business proposal with direct impact on customer.

 

About the Author

ICWA, 7years Industrial experience in Auditing,Marketing,Accounting, Research,Publication,Teaching and Finance.

I may help students online in Querry solutions related to Auditing, Marketing, Accounting, Econnomics, Finance, Costing for XI, XII, CWA, CA, BBA, MBA students .

I am considering an Option strategy similar to a covered call except I would buy a LEAP instead of the stock?

i.e. Yahoo is trading at about $27 i would buy a LEAP JAN09 17.5 strike at $11.15 and sell/write a JAN08 30 strike for $1.15 total cost is $10 ($1000 for the contract), and as the calls I write expire I would write new ones for the next month until I get exercized (in the first trade that would be at $30 for a $250 profit on a $1000 investment) or offset the LEAP close to expiration, always making sure the strike price was high enough so that if excersized I would make money counting in the premiums I collected. Basically this is similar to standard covered calls but more leverage (I belive the proper term for this strategy would be a "Diagonal Spread"). Is there any downside of using LEAPS instead of Stock that I am missing besides the obvious time constraint where I have a little over a year to pull a profit as opposed to buying the stock where I have as long as it takes? Any suggestions or tips are appreciated.

What you are doing is using a LEAPS as an alternative for the stock in a covered call which is, in fact, a diagonal spread.

Here is what the CBOE has to say about using a LEAPS as an alternative to owning the stock:

http://www.cboe.com/Strategies/BEL-CallsAsStockAlternative.aspx

You are correct you are getting leverage by using the LEAPS instead of the stock, but you are also paying for that leverage. Since you are effectively paying $28.65 ($17.50 + $11.15) per share when the stock is trading for less than that amount, you should subtract the stock price from $28.65 to determine how much you are paying.

One common mistake that people make when considering a strategy like the one you mentioned is that they expect to get the same premium every time a call expires and they sell another. Just remember that when the Jan08 call expires you may not be able to get nearly as much for a March $30 call and maybe not even that amount for a lower strike price. A decrease in implied volatility (IV) and/or the stock price may make it much more difficult to make a profit that you expect.

I am not trying to talk you out of trying this strategy. It is a fairly common strategy that is not overly dangerous. I just want you to know that even if your first few trades do work out well, the strategy is not as easy as it may appear at first. Don't trade a lot of contracts at a time until you have had some go bad on you and you have figured out how to handle it when the do.

Aside from the sentence "This is nothing like a covered call." I pretty much agree with what Bob siad in the first reply.

One last point I'll add is that there is no such thing as a "LEAP" in the options world. "LEAPS" is an acronym and always includes the final "S" even if you are only talking about a single contract.

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