GCSE Business Studies Unit 3 March Mock Aaron’s Furniture Please refer to your case study booklets.

1 hour 30

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Teacher

Mark / 90

Grade

Target grade

Things I did well

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Main thing I have learnt

from the mock

1

2. Which method of production do you recommend Aaron’s should use to make wardrobes

In Extract 1 Sunjit Patel (line 38) suggests that Aaron’s might close down the Bowton factory because of changes in timber prices and changes to the exchange rate. The current cost to Aaron’s of having an Egerton Wardrobe made in Sweden is 5400 Krona

Explain what would happen to the cost to Aaron’s of importing finished wardrobes from Sweden if the exchange rate changed from £1 = 12 Swedish Krona to £1 = 15 Krona.

Explain what would happen to the cost to Aaron’s of importing finished wardrobes from Sweden if the exchange rate changed from £1 = 12 Swedish Krona to £1 = 10 Krona.

Which exchange rate would be better for Aaron’s to make more profit selling the wardrobes for £500?

In Extract 9 Anna Aaron explains that Aarons use Forest Stewardship Council approved providers of timber. Evaluate this strategy.

In your answer explain the advantages to Aaron of this as well as the possible disadvantages. From this evaluation make a conclusion about whether this is the right decision for Aaron’s

10

Using the information in Fig. 3 in the case study, calculate, using the contribution method, the number of Egerton bedside tables that Aarons need to sell at the price mentioned to break even.

If Aarons sold 500 bedside tables in one month, how much profit would they make?

Aaron’s furniture is concerned about the high level of competition from other firms providing bedroom furniture.

Recommend how Aarons might change its competitive environment. Give reasons for your recommendations

Is the market for Bedroom furniture a competitive one, give a reason for your answer from the case study.

Catherine Patel is considering using FSC sourced wood, which is a sustainable product. She knows that there are arguments in favour of using FSC wood and arguments against.

1 Argument in favour of using FSC wood

2 Argument against using FSC wood

Aaron’s factory is getting too small. It is working at full capacity and if Aaron’s export more they will need a new, bigger one. A new factory is vacant and seems ideal, it could be leased or Aaron’s could buy it. Should Aaron’s lease the new factory or buy it using a mortgage? In your answer you must compare the advantages and disadvantages of buying with a mortgage and leasing the new factory.

10

8 Explain what is meant by the term “sustainability”

9 Why might the government give Aaron’s a grant towards the costs of buying a biomass burner at the factory in Bowton ?

Aarons are considering looking at developing its export markets, as it suggests in Extract 8.Using Figure 4,5 and 6, recommend which market Aarons should focus on, Eurozone countries or Canada?You should supply reasons for your decision showing an understanding of the data in each of the three tables.

Evaluate the decision described in Extract 2 to reduce the number of pieces of bedroom furniture offered in each range. This will mean Aaron’s will only make 2 different sizes, not 22, and also they will use a different production method.

Make sure that you explain the advantages and disadvantages of the old and the new method before making recommendations about what they should do.

= 90 marks