Identify and explain how the following two stakeholder groups of MF will be affected by the production of this new product. Employees: Explanation: Customers: Explanation:

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2019). The mark or mark type is shown in brackets.

1. [2 × 1] Knowledge - award one mark for how each stakeholder group is affected
2. [2 × 1] Analysis - award one mark for a relevant explanation of how each stakeholder group is affected
3. [2 × 2] Application – award two application marks for how each stakeholder group is affected
4. Answers are likely to include:
5. Employees
6. increased production – output per worker increase
7. increased job security – more skills acquired
8. new production methods used – workers may not like change
9. more training required – feel more motivated – gain more
10. job satisfaction – gain higher wages
11. Customers
12. more choice of products/ help to reduce weight for some consumers
13. may not buy the new product – as customers are unhappy with the effect on the environment
14. better meets the needs of some customers - makes customers feel more loyal to the company
15. will have to pay a higher price if customers want the new ice cream
16. Indicative response:
17. Increased production (1) as the new sugar free ice cream will be produced (ap). This will require further training for employees as the new equipment is different to the original equipment in the factory (1) and the new automated equipment that has been installed to produce the new ice cream will require quite different skills (ap).
18. Possible application marks:
19. Sugar free ice-cream; MF has a large market share of the food markets; objectives are growth and increased market share; new automated production line required; new skilled workers need recruiting; increasing trends of people being overweight in country X.
20. There may be other examples in context that have not been included here.
21. Relevant points might include:
22. Government
23. Helps to see/calculate the amount of tax due
24. Increased profitability means higher tax revenue
25. May need to support failing business with grant or subsidy
26. Bank
27. Helps establishes if MF can repay any outstanding loans – or if any further loans might be required
28. shows liquidity of MF – shows profitability of MF – can be used to assess risk to the bank from loans or overdraft
29. Improved liquidity is good as more likely to repay debts
30. Shareholders
31. See whether dividends are likely to be paid – judge likely direction of share price – consider whether further investment should be made
32. Increased profitability should lead to increased dividends
33. Knowledge/Analysis/Evaluation – award up to 10 marks using the levels-based mark scheme below.
34. Level 3: At least 2 x Level 2 + 9-10 marks for well justified conclusion as to which user would find the information most helpful and why the other two users will find the information less helpful. 7-8 for limited conclusion as to which user of the accounts will find the information most helpful
35. Level 2: 4-6 marks Detailed discussion of how each user might find the accounts helpful.
36. Level 1: 1-3 marks Outline of how each user might find the accounts helpful.
37. Level 1 – 1 mark for each L1 statement (max of 3 marks), e.g. the bank might want to see if MF is making a profit to see if they can repay any loans.
38. Level 2 - 1 x L2 explanation can gain 4 marks and a further mark can be awarded for each additional L2 explanation (max 6 marks), e.g. the bank might want to see if MF is making a profit to see if it can repay any loans otherwise the bank may not have the loan repaid. This would cause problems for the bank as it would risk losing its money. Also MF might need an overdraft and the bank could also see that the overdraft is likely to be repaid after seeing that the liquidity of the business is good (L2).
39. Level 3 - For L3 to be awarded there needs to be at least two L2 marks awarded and then a conclusion as to which user of the accounts will find the information most helpful.
40. Award up to 2 additional marks for relevant application.
41. Possible application marks:
42. Sugar free ice-cream; MF is a public limited company established 30 years ago; MF has a large market share of the food markets; objectives are growth and increased market share; new automated production line required; increasing trends of people being overweight in country x; increased government costs to treat overweight people. Reference to data in Appendix 1.
43. There may be other examples in context that have not been included here.