PS is a private limited company operating in country H. It sells perfume for men and women using its own website. PS purchases the perfume in large quantities from various manufacturers and then sells it in smaller quantities to its customers. Most of the perfumes are sold in glass bottles. PS has two main ways in which it sells perfume: • A website where customers can purchase a range of perfumes. The perfumes are priced to be lower than high street competitors. • A subscription service where customers pay a monthly fee for a mystery perfume to be delivered each month. All of PS's products are delivered to customers' homes using the postal service. The packages can be left in a mailbox or in a safe place outside of the home. PS has an aim to improve the sustainability of its operations. PS uses incremental budgeting. Table 1.1 shows the budgeted and actual cost and revenue data for 2023. [Table 1.1] The directors of PS have decided that the business needs a Marketing Manager. The role of the Marketing Manager will be: • to plan the recruitment and training of a new sales team • to organise the production of digital promotions • to advise the Board of Directors on changes to the PS product portfolio. The directors have shortlisted five suitable applicants and plan to invite them all to an assessment centre as part of the recruitment process. Table 1.1 Budgeted and actual cost and revenue data for 2023 ($000) | | Budgeted | Actual | Variance | |---|----------|--------|----------| | Revenue | 500 | 600 | x | | Direct costs | 300 | 350 | y | | Indirect costs | 150 | 125 | z |

Mark scheme

Marking points from the official mark scheme (May/June 2024). The mark or mark type is shown in brackets.

1. [1] limited liability
2. [1] shareholders
3. [1] incorporated
4. [1] shares not traded on stock exchange/publicly
5. [1] must make accounts publicly available
6. [1] separate legal identity
7. [1] continuity
8. [1] sells shares to people they know (invited).
9. [1] Knowledge of sustainability: maintaining operations/production.
10. [1] Explanation of sustainability: maintaining operations/production: at the current level.
11. [1] Explanation of sustainability: the ability to maintain an environmental balance: now and in the future for our planet's natural environment.
12. [1] Explanation of sustainability: to conserve natural resources: to support the wellbeing of current and future generations.
13. [1] Context applied to business of how to behave in a sustainable way, including: An example of a business behaving in a sustainable way.
14. [1] Context can be made to PS or any other scenario/context/business/person.
15. [1] Allow application to environmental sustainability.
16. [1] Revenue variance (x): 600 - 500 = 100 Favourable (F)
17. [1] Direct costs variance (y): 300 - 350 = -50 (or 50) Adverse (A)
18. [1] Indirect costs variance (z): 150 - 125 = 25 Favourable (F)
19. [1] Simplicity / easy to adjust
20. [1] Speed (quicker)
21. [1] Consistency
22. [1] Avoids conflict between managers
23. [1] Realistic
24. [1] Allows business to respond to changes
25. [1] Explanation of a benefit to a business of using incremental budgeting.
26. [1] Context linked to a benefit to PS of using incremental budgeting. (e.g. Use of Table 1.1; Each budget has a variance; OFR from answer to Q1(b)(i); PS sells through its own website; Web sales and subscription available; PS uses the postal service; Aim to improve the sustainability of its operations; New Marketing Manager being recruited).
27. [1] Knowledge of an assessment centre: a combination of tasks and activities that test suitability for the job; chance to demonstrate a wider range of skills than during a traditional face-to-face interview; hosted over anything from an afternoon to two days; often the final stage of the selection process; a group of candidates usually attend together.
28. [1] Knowledge of an advantage: More suitable/knowledgeable/skilled recruit; Wider skilled recruit / more skills tested; More detailed process; Useful as final stage of recruitment; Allows direct comparison with other candidates; Less time involved.
29. [1] Knowledge of a disadvantage: Takes more time; Cost of an assessment centre; Not realistic / not linked to specific employment / may assess unnecessary skills / knowledge.
30. [1] Context applied to an advantage (e.g. To plan the recruitment and training of a new sales team; To organise the production of digital promotions; To advise the board of directors on changes to the PS product portfolio; To do tasks relating to the marketing of PS (e.g. perfume, website sales, subscription sales, importance of packaging); Five shortlisted applicants; Use of Table 1.1).
31. [1] Context applied to a disadvantage (e.g. To plan the recruitment and training of a new sales team; To organise the production of digital promotions; To advise the board of directors on changes to the PS product portfolio; To do tasks relating to the marketing of PS (e.g. perfume, website sales, subscription sales, importance of packaging); Five shortlisted applicants; Use of Table 1.1).
32. [AO3: 1-2] Limited analysis: candidate shows one link in the chain of analysis (e.g., Better skilled employees can help PS to increase sales revenue).
33. [AO3: 3-4] Developed analysis: candidate shows two or more links in the chain of analysis or a two-sided analysis (e.g., Better skilled employees (K) so that PS can make sure their new manager can organise the production of digital promotions (App) which can help PS to increase their sales revenue by selling more perfume and make a greater profit (An)).
34. [2] Knowledge of the role of packaging: information to customers; protection for the product; to attract potential customers; to promote a brand / branding; to enable efficient distribution/portability; to add value; to meet legal requirements (labelling, weight, ingredients etc.).
35. [2] Context applied to PS (e.g. website purchases; subscription purchases; Most perfumes sold in glass bottles (fragility); all products delivered to homes by post; can be left in mailbox; can be left in safe place outside of the home (weatherproof); PS aim to improve sustainability of operations; use of Table 1.1).
36. [AO3: 1-2] Analysis (link to causes/impacts/consequences): Information to customers – increase sales/profits; Protection for product – reduce costs from breakages; Left outdoors – lower customer dissatisfaction/repeat sales; Attract customers – increase sales (but less effect online); Efficient distribution/portability – reduce delivery costs; Add value – increase sales/profit (but less value if not main product); Sustainability – balance protection vs. less sustainability.
37. [AO4: 1-2] Limited evaluation: unsupported judgement / weak evaluative comment / attempt to balance arguments.
38. [AO4: 3-4] Developed evaluation: supported judgement / reasonable evaluative comment.
39. [AO4: 5-6] Developed evaluation in context: supported judgement in context / reasonable evaluative comment in context (factors: cost as proportion of total costs; packaging from manufacturers; likelihood of products left outside; future retail shops; new Marketing Manager's strategy).