O-LevelBusiness StudiesFinancial information and decisions7115/11 · May/June 2013 · Q120 Marks

Kew Construction is a public limited company. It specialises in building large houses. Each house costs $30000 to build and the company adds 40% to total cost to calculate the selling price. Last year sales fell by $90m and dividends were reduced. The Human Resources Director is worried: ‘If sales do not improve, I will need to make some workers redundant. How can I decide which workers to make redundant?'

(a)What is meant by 'dividends'?[2]
(b)Calculate the selling price of one house.[2]
(c)Identify and explain two disadvantages to a business of being a public limited company.[4]
(d)Identify and explain three methods that Kew Construction could use to improve its level of sales.[6]
(e)What do you think are the most important factors for the Human Resources Director to consider when selecting which workers to make redundant? Justify your answer.[6]

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Topic: Financial information and decisions, O-Level Business Studies (syllabus 7115). Structured question, 20 marks.
Source: O-Level Business Studies, May/June 2013 Paper 1 Variant 1, question 1.

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