Business Studies Grade 12 NSC June 2014 Memo (English)

Downloaded from hlayiso.com gow “=i basic education Se Department: (GO) Basic Education RVI REPUBLIC OF SOUTH AFRICA SENIOR CERTIFICATE EXAMINATION BUSINESS ECONOMICS HIGHER GRADE 2014 MEMORANDUM MARKS: 400 This memorandum consists of 31 pages. Copyright reserved Please turn over

Business Economics/HG SECTION A-— ANSWER SHEET QUESTION 1 1.1. MULTIPLE-CHOICE QUESTIONS Answer each question by making a cross (X) in the appropriate block. Downloaded from hlayiso.com SCE - Memorandum 2 1.1.1 A B Cc D Xx 1.1.2 A B Cc X_|D 1.1.3 A B xX [Cc D 1.1.4 A B Cc D 1.1.5 A B Cc X_|D 1.1.6 A B Cc D 1.1.7 A B Cc D Xx 1.1.8 A B Cc X_ |D 1.1.9 A B Cc D x 1.1.10 A B x_ [Cc D 1.1.11 A B Cc D 1.1.12 A B x [Cc D 1.1.13 A B [e D xX 1.1.14 A B Cc xX |D 1.1.15 A B [e} D X 1.1.16 A B x_ 1c D 1.1.17 A B Cc D 1.1.18 A B x [Cc D 1.1.19 A B Cc D 1.1.20 A B Cc xX [D 1.2. MATCHING ITEMS 1.2.1 D 1.2.2 E 1.2.3 F 1.2.4 A 1.2.5 H Copyright reserved DBE/2014 (20 x 3) (60) 60 (5x2) (10) 10 Please turn over

Business Economics/HG Downloaded from hlayiso.com 3 SCE - Memorandum 1.3. ONE WORD/TERM DBE/2014 NUMBER WORD(S)/TERMS 1.3.1 Security VV 1.3.2 Good faith VV 1.3.3 Excess payment VV 1.3.4 Burglary (insurance) VV 1.3.5 Fidelity (insurance) VV 1.3.6 Iron safe clause VV 1.3.7 Reinsurance VV 1.3.8 Cession VV 1.3.9 Unemployment insurance VV 1.3.10 Road Accident Fund vV¥ 1.4 DATA RESPONSE 1.4.1 1.4.2 1.4.3 1.4.4 1.4.5 Q| >| 0] @| w Copyright reserved TOTAL SECTION A: 100 (10x 2) (20) 20 (5x2) (10) 10 100 Please turn over

Downloaded from hlayiso.com Business Economics/HG 4 DBE/2014 SCE - Memorandum SECTION B GUIDELINES FOR MARKING: ° When awarding marks for facts, take note of the submaximums indicated, especially if candidates do not make use of the same subheadings. Remember, headings and sub-headings are encouraged and contribute to insight (structuring/logical flow/sequencing) and indicates clarity of thought. (See BREAKDOWN at the end of each question.) ° Allocate TWO marks for complete sentences. Allocate ONE mark for phrases, incomplete sentences and vague answers. ° The components of insight are indicated at the end of the suggested answer for each question. Note that the components vary with each question. ° If the candidate identifies/interprets the question incorrectly, he/she can still obtain marks for insight. Take particular note of the repetition of facts. Mark all relevant facts until MAXIMUM mark in sub-section has been attained. Write MAX after maximum marks have been obtained. Indicate insight in the left-hand margin with a symbol, e.g. *. At the end of each essay indicate the allocation of factual marks and insight marks as follows: (example only) Copyright reserved Please turn over

Downloaded from hlayiso.com Business Economics/HG 5 DBE/2014 SCE - Memorandum SECTION B Answer any TWO questions from this section. QUESTION 2: FORMS OF OWNERSHIP PRIVATE COMPANY INTRODUCTION e Suitable introduction to topic. VV MAX e Possible reasons as to why other forms of ownership are not suitable. (2) CHARACTERISTICS OF A PRIVATE COMPANY e Aminimum of 1 and a maximum of 50 co-owners / shareholders WwW e Managed by at least 1 director chosen by and out of the shareholders e The establishment of a private company adhere to the Companies Act 61 of 1973 The liability of the shareholders is limited The name must end with (Pty) Ltd. The name must be registered It has its own legal entity, independent of the shareholders Capital is contributed by the founders by buying shares in the company Shares are not freely transferable Profits (dividends) are divided according to the kind and number of shares which each shareholder holds It has unlimited continuity Not necessary to audit financial statements Not necessary to compile a balance sheet As a legal entity, it must pay income tax on the profit of the company MAX Any other suitable characteristic (10) ADVANTAGES OF A PRIVATE COMPANY e The liability of the shareholders is limited — they are only responsible for the amount of the shares that they have bought VV e Notnecessary to hold annual meetings of shareholders e Suited to undertakings in which secrecy is important e Can start a business as soon as the company is registered (when the Certificate of Incorporation is received) e Suitable for entrepreneurs who have limited capital resources e Shareholders can be increased up to 50, which can increase the capital e Suitable for families with expertise e Has its own legal entity MAX e Any other suitable advantage (8) Copyright reserved Please turn over

Downloaded from hlayiso.com Business Economics/HG 6 DBE/2014 SCE - Memorandum DISADVANTAGES OF A PRIVATE COMPANY e Capital is limited to the contribution of 50 shareholders VV e Shares are not freely transferable ¢ Company must pay income tax on the profits and the shareholders on their dividends e Ifthe private company becomes too big, a public company needs to be established There may be managerial problems because of the limited membership Registration of this form of ownership is expensive and takes a long time Difficult to register a private company — lots of legal requirements DOCUMENTS TO BE SUBMITTED e The Memorandum of Association vv The Articles of Association Address and postal address of the registered head office Receipt for the payment of the prescribed registration fees Receipt for the payment of annual tax Written consent of each director to act in that capacity List of chosen directors The constitution FORMATION PROCEDURE e Reserve name VV e Draw up documents o The Memorandum of Association (max 4) " Explains the size and nature of the business * Contains: Name; Objective; Liability; Shares; Association o The Articles of Association (max 4) = Explains internal rules and regulations " Contains: Shares; Meetings; Directors; Dividends; Accounting records e Register document with CIPC e Wait for Certificate of incorporation before start of business CONCLUSION e Candidates view on exclusivity in private company v¥V e Any suitable comment NOTE: CANDIDATES MAY DESCRIBE THE FORMATION IN TERMS OF THE NEW COMPANIES ACT (71 OF 2008) AND NEED TO BE CREDITED ACCORDINGLY. FACTUAL MARK 40 INSIGHT 10 TOTAL 50 Copyright reserved Please turn over MAX (8) MAX (10) MAX (10) MAX (2)

Downloaded from hlayiso.com Business Economics/HG 7 DBE/2014 SCE - Memorandum INSIGHT Structure/Layout e Inclusion of introduction, discussion and conclusion 2 (Introduction, discussion and conclusion = 2; introduction and discussion = 1; discussion and conclusion = 1; only discussion = 0) Analysis and interpretation e Learner's ability to break down the question to show understanding of what is being asked. 2o0r0 Synthesis e How does the candidate create an answer to satisfy the requirements of the question? e Relevant parts included and irrelevant information excluded 4 4 components (see breakdown) = 4; 3 components = 3; 2 components = 2; 1 component = 1 Originality and application e Candidate's reasoning in the essay about the Private company as 2 form where control over ownership is maintained. MAX 10 BREAKDOWN OF QUESTION Introduction Max 2 marks Characteristics Max 10 marks Advantages Max 8 marks Disadvantages Max 8 marks Documents to be submitted (and) | Max 10 marks Registration (can be combined) Max 10 marks Conclusion Max 2 marks MAXIMUM 40 MARKS Copyright reserved Please turn over

Downloaded from hlayiso.com Business Economics/HG 8 DBE/2014 SCE - Memorandum QUESTION 3: MARKETING FUNCTION PACKAGING INTRODUCTION e Reason why it has to suit manufacturers, dealers and public VV MAX e Other suitable introduction (2) PURPOSE OF PACKAGING Protect the content Use it for easy handling Extent the lifespan of the product For easy storage/shelving Improve sales Provide information on the product For marketing purposes Easy distribution MAX Any other suitable purpose (6) FORMS OF PACKAGING ¢ Speciality packaging.vV o Special package to create certain image VV o E.g. Jewellery/soap for Hotel/etc. V e Re-usable packaging o Package re-used for same purpose o E.g. dishwashing liquid e Multiple/combination packaging o Two related products together o Shampoo and conditioner e Packaging for double use o Container used for something else o E.g. Coffee jar used for canned fruit e Kaleidoscopic packaging o Part of packaging changes continuously o E.g. Pictures of soccer players on cool drink cans e Packaging for immediate use o Easy opening for quick consumption of content o E.g. Packet for chips e Unique packaging o The container attracts the attention and not the content o Eg. Glass bottle with perfume can be used as a flower vase e Environmentally friendly o The container should not be harmful to the environment o E.g. Not plastic bags MAX e Other acceptable form (20) Copyright reserved Please turn over

Downloaded from hlayiso.com Business Economics/HG 9 SCE - Memorandum REQUIREMENTS OF PACKAGING e Must be eye-catching/attracts attention of consumers.vV o Use of colour VV e Satisfy the requirements of dealers. o Meet the demands e.g. certain content number e Must be designed for the target market. o Must suit the people it is meant for e Must be different from competitors for easy identification. o E.g. Coke is in red can while Pepsi is in blue can e Must promote the image of the business. o It must contribute to the way people see a business e Must be well designed and strong to protect the contents. o E.g. Eggs in suitable container to prevent it from breaking e Must suit the product. o E.g. Liquids should not leak e Must be suitable for display purposes. o Hang ona shelf/Stacked on top of each other e Environmentally friendly/Green DBE/2014 o Prevent exhaustion of natural resources/Prevent damage to environment e Other suitable requirement CONCLUSION Any suitable comment on packaging. VV FACTUAL MARK 40 INSIGHT 10 TOTAL 50 INSIGHT Structure/Layout e Inclusion of introduction, discussion and conclusion 2 (Introduction, discussion and conclusion = 2; introduction and discussion = 1; discussion and conclusion = 1; only discussion = 0) Analysis and interpretation e Learner's ability to break down the question to show understanding of what is being asked. 2or0 Synthesis e How does the candidate create an answer to satisfy the requirements of the question? e Relevant parts included and irrelevant information excluded 4 (3 components (see breakdown) = 4; 2 components = 2; 1 component =1) Originality and application * Candidate's reasoning in the essay about the use of packaging to promote products. 2 MAX 10 Copyright reserved Please turn over MAX (20) (2)

Downloaded from hlayiso.com Business Economics/HG 10 DBE/2014 SCE - Memorandum BREAKDOWN OF QUESTION Introduction 2 marks Purpose of packaging Max 6 marks Forms of packaging Max 20 marks Requirements for packaging Max 20 marks Conclusion Max 2 marks MAXIMUM 40 MARKS Copyright reserved Please turn over

Downloaded from hlayiso.com Business Economics/HG 11 DBE/2014 SCE - Memorandum QUESTION 4: FINANCIAL FUNCTION INTRODUCTION Comments on the risk involved in credit trading/credit can be rewarding.vV Comments on the management of credit in general. MAX Any other acceptable comment. (4) ADVANTAGES OF CREDIT TRADING The dealer has more customers who cannot buy for cash.vv¥ The dealer has more regular customers as the buyer purchases from the same dealer/obtains goodwill/loyalty from customers. Granting of credit may be used as means of advertising and attracts customers. The dealer may charge more to cover extra costs of financing and administration. Credit trade stimulates the economy. Address lists of debtors may be used to advertise special offers. MAX Any other suitable advantage (8) DISADVANTAGES OF CREDIT TRADE The dealer requires more working capital Vv The risk of bad debts Costly to service the debtors Customers buy more than what they can afford Dealer has to employ more staff Customer pays more for the article MAX Any other suitable disadvantage (8) DUTIES OF THE CREDIT DEPARTMENT Determine the terms and conditions of credit for each client VV Allocate credit according to business policy Be conversant with credit policy Determine credit risks Check financial status of persons who are applying for credit Set a credit limit for each debtor Keep a close check that customers do not exceed their terms of credit Send account statements regularly to the debtors Check that complete records are kept of credit sales and the payment of accounts Follow up accounts in arrears according to the predetermined credit policy Determine when credit may no longer be granted to a customer Refer overdue accounts to a legal assistant Control volume of credit sales Monitor tendencies in the credit market, for example changes in interest rates MAX Any other suitable duties (20) Copyright reserved Please turn over

Downloaded from hlayiso.com Business Economics/HG 12 DBE/2014 SCE - Memorandum COLLECTION OF OVERDUE ACCOUNTS Send account with sticker/indication that payment is overdue VV Send friendly letter of warning that payment is in arrear Do not allow further sales on credit Send letter of demand for payment Send final warning that if settlement does not take place in due course legal action will be taken e Take legal action MAX e Any other suitable action (8) CONCLUSION e Any final comment on credit trade VV e Any other suitable comment. (2) FACTUAL MARK 40 INSIGHT 10 TOTAL 50 INSIGHT Structure/Layout e Inclusion of introduction, discussion and conclusion 2 (Introduction, discussion and conclusion = 2; introduction and discussion = 1; discussion and conclusion = 1; only discussion = 0) Analysis and interpretation e Learner's ability to break down the question to show understanding of what is being asked. 2or0 Synthesis e How does the candidate create an answer to satisfy the requirements of the question? e Relevant parts included and irrelevant information excluded 4 (4 components (see breakdown) = 4; 3 components = 3; 2 components = 2; 1 component = 1 Originality and application e Candidate's reasoning in the essay about the use of credit by 2 businesses. MAX 10 BREAKDOWN OF QUESTION Introduction 4 marks Advantages of credit trading Max 8 marks Disadvantages of credit trading Max 8 marks Duties of the credit department Max 20 marks Collection of overdue accounts Max 8 marks Conclusion Max 2 marks MAXIMUM 40 MARKS Copyright reserved Please turn over

Downloaded from hlayiso.com Business Economics/HG 13 DBE/2014 SCE - Memorandum QUESTION 5: GENERAL MANAGEMENT FUNCTION INTRODUCTION e Accept any suitable comment on general management. VV MAX e Any comment or planning, organising, leading and/or controlling (2) BASIC ELEMENTS e PLANNING o To formulate aims, collect data, select best ways to perform duties, implement them and follow up to ensure correct implementation.vVv e ORGANISING o Providing structures in order to put plans into action e LEADING/ACTIVATING o To influence human behaviour to comply with the policy of the business in performing duties e CONTROL o To ensure that obtained results meet the preset standards MAX ACCEPT OTHER SUITABLE EXPLANATIONS OF THE ELEMENTS (8) ADDITIONAL ELEMENTS e DECISION-MAKING V o To study a number of facts or detail and select/come to a conclusion VV e COMMUNICATION o The transfer and receipt of concepts, feelings, attitudes and information from one person to another e MOTIVATION o To put in place powers and desires from within and from outside which enables a person to reach a goal e DISCIPLINARY ACTION o To force someone to change behaviour that does not comply with required standards or objectives e CO-ORDINATION o To put together different activities in harmony to reach a certain goal. DELEGATING o Giving subordinates instructions as well as authority to perform them. MAX ACCEPT OTHER SUITABLE EXPLANATIONS OF THE ELEMENTS (18) STEPS IN PLANNING (NEED NOT BE IN FOLLOWING ORDER) Establishing aims.vV¥ Gathering information/Investigate/Assumptions of what can be obtained Analysing information Choosing the best alternative Developing of action plans Implementing MAX Follow up (10) Copyright reserved Please turn over

Downloaded from hlayiso.com Business Economics/HG 14 DBE/2014 SCE - Memorandum METHOD (STEPS) OF CONTROL (NEED NOT BE IN FOLLOWING ORDER) e Determine standardsvV e Measure results e Compare results with standards e Take corrective steps/actions MAX e Any other suitable step (8) RELATION BETWEEN PLANNING AND CONTROL e Planning set the standards VV o Control must ensure that those standards are metv¥ e When control shows deviations from the set standards o Planning will have to be redone MAX e Any other suitable comment on relationship between the two. (8) CONCLUSION Any suitable comment regarding management in general. Vv (2) FACTUAL MARK 40 INSIGHT 10 TOTAL 50 INSIGHT Structure/Layout e Inclusion of introduction, discussion and conclusion 2 (Introduction, discussion and conclusion = 2; introduction and discussion = 1; discussion and conclusion = 1; only discussion = 0) Analysis and interpretation e Learner's ability to break down the question to show understanding of what is being asked. 2or0 Synthesis e How does the candidate create an answer to satisfy the requirements of the question? e Relevant parts included and irrelevant information excluded 4 (5 components (see breakdown) = 4; 3 components = 3; 2 components = 2; 1 component = 1) Originality and application e Any comment on management of a business to improve 2 performance and achievement of goals. MAX 10 BREAKDOWN OF QUESTION Introduction Max 2 marks Basic elements Max 8 marks Additional elements Max 18 marks Steps in planning Max 8 marks Steps/method in controlling Max 8 marks Relation between planning and control Max 8 marks Conclusion 2 marks MAXIMUM 40 MARKS TOTAL SECTION B: 100 Copyright reserved Please turn over

Downloaded from hlayiso.com Business Economics/HG 16 DBE/2014 SCE - Memorandum SECTION C GUIDELINES FOR MARKING e If for example FIVE facts are required, mark the FIRST FIVE responses of the candidate. Ignore the rest of the responses. e If two correct facts are written in one sentence, award the candidate FULL credit. e If candidates are required to provide their own examples/views, brainstorm it at the marking centre to finalise the alternative answers. e All questions that request candidates to ‘explain/discuss/describe' will be marked as follows: HEADING = VV and EXPLANATION = ¥ e In questions that require candidates to 'name / list / mention’, the answers of candidates can be in phrases and not necessarily in full sentences. e YES/NO without motivation = 0 marks Copyright reserved Please turn over

Downloaded from hlayiso.com Business Economics/HG 16 DBE/2014 SCE - Memorandum SECTION C Answer any FOUR questions from this section. QUESTION 6: FORMS OF OWNERSHIP 6.1 THREE DISADVANTAGES OF A SOLE TRADER e Unlimited liability for the debt of the business VV o If business cannot come up with enough cash to pay debt he/she must pay it personally ¥ e There is no continuity o When owner dies/retires business closes down e Capital is limited to what the owner can contribute or borrow o Own creditworthiness determines amount available e Owner may lack experience in certain areas o Cannot perform all duties equally well e Cannot afford the best employees o Limited income e =Nota legal entity o Cannot sue or be sued/Cannot buy property in name of business/ No loans in name of business e Any other suitable disadvantage ANY 3X3 (9) 6.2 RIGHTS AND DUTIES OF PARTNERS e A partner must deliver what he/she agreed upon VV o Duties/Contribution in skills, assets or capital ¥ e Partners must begin and continue to operate partnership in manner agreed upon o Stick to partnership agreement e Partnership agreement is based on good faith o They must trust each other e Each partner is agent of the business o Partners bind each other in agreements/actions e Free access to the financial records of the business o Each partner has the right to know the financial state of the business e Prevention from committing criminal offences o One partner's deeds of criminal intend affects the others e Any other suitable disadvantage ANY 3X3 (9) 6.3 PROFITSHARING IN PARTNERSHIP AGREEMENT e Partners decide on how it will be divided. VV Can be according to capital contribution/ Can be equally Can be any other way Any other suitable way ANY 2X2 (4) Copyright reserved Please turn over

Downloaded from hlayiso.com Business Economics/HG 17 DBE/2014 SCE - Memorandum 6.4 DIFFERENCES BETWEEN CC AND PARTNERSHIP REGARDING: TAX PAYMENTS cc PARTNERSHIP The business pays tax according to tax rate on income received VV Business does not pay the tax, but the partners do so in their private capacity. vy RESPONSIBILITY FOR DEBTS BY THE BUSINESS cc PARTNERSHIP (4) The CC is responsible for own debt unless it can be proved that a member was responsible for the debt ¥V The business is not responsible/The partners are jointly and severally responsible for the debt. vV (4) 6.5 6.5.1 MEMORANDUM OF ASSOCIATION e Basic document containing the nature and scope of the company. VV e Describes the relationship between the company and outsiders. e Contains: (max ONE) fo} oooo°0 Name Aim Limited liability Share capital Signing Amendments ANY2X2 = (4) 6.5.2 ARTICLES OF ASSOCIATION e Document that states the internal rules and regulations of the company. vv e It provides the guidelines for running of the company. e Contains: (max ONE) fo} oo0o000 Copyright reserved Meetings Accounting records Directors Dividends Shares Amendments Signing ANY2X2 = (4) Please turn over

Downloaded from hlayiso.com Business Economics/HG 18 DBE/2014 SCE - Memorandum 6.5.3 PROSPECTUS e Invite public to buy shares. vv e Offer shares to the public at a price. e Provides information about the company. e Any other suitable response. ANY2X2 = (4) 6.6 FOUR REASONS FOR AMALGAMATION e Gain access to services V¥ e Inthe same line of business e To provide broader range of services e Survival e Additional capital e Lack of sound management e To change management e Ensure supply e Eliminate competition e Eliminate duplicate costs e Gain status e To be less vulnerable e Tax advantages e Any other suitable reason ANY 4X2 (8) [50] QUESTION | MARKS 6.1 9 6.2 9 6.3 4 6.4 8 6.5 12 6.6 8 TOTAL 50 Copyright reserved Please turn over

Downloaded from hlayiso.com Business Economics/HG 19 DBE/2014 SCE - Memorandum QUESTION 7: MARKETING AND PRODUCTION FUNCTIONS 7.1 CONSUMER GOODS e Convenience goods. vV © products for everyday use/Example e.g. milk ¥ e Shopping/Select goods. o Products not often purchased/Satisfy specific needs/Example e Speciality goods o Expensive goods/Needs careful consideration/Example 3X3 (9) 7.2 TRADE MARKS DEALER’S TRADEMARK e Trade mark of the dealer in the products. VV OR e Example of dealer's mark = P’nP No name brand MANUFACTURER’S TRADEMARK e The same trade mark on all the products of the manufacturer VV OR e Example of manufacturer's trade mark = Toyota 2X2 (4) 7.3 FOUR FACTORS INFLUENCING PRICES Satisfaction of needs VV Nature of demand Competition Availability of substitutes Form of market Normal trade practices, discount and rebates Fixed prices Credit policy Reaction of dealers Production and distribution costs Marketing strategy ANY4X2 = (8) 7.4 CHANNELS OF DISTRIBUTION OF FRESH FRUIT PRODUCER/MANUFACTURER DIRECT VV INDIRECT ONE INTERMEDIATE WW MORE THAN ONE INTERMEDIATE VV Fruit farmer to | Fruit farmer to retailer to OR | Fruit farmer to fruit consumer VV | consumer VV agent to wholesaler to retailer to consumer VV CONSUMER OR Copyright reserved Please turn over

Downloaded from hlayiso.com Business Economics/HG 20 DBE/2014 SCE - Memorandum CHANNELS OF DISTRIBUTION OF FRESH FRUIT Direct VW ¢ Liaise directly with the consumer — fruit farmer to consumer VV Indirect e Use one intermediary VV o Fruit farmer to retailer to consumer VV OR e Use more than one intermediary V o Fruit farmer to fruit agent to wholesaler to retailer to consumer VV ACCEPT APPROPRIATE EXAMPLES ANY2X4 (8) 7.5 PRINCIPLES OF ADVERTISING Promote sales VV Promote image of the business Stimulate primary demand Stimulate selective demand Reacting to competitor's advertising Increasing efficiency of sales staff Emphasising new uses of the product Reminding consumers Reassuring consumers of correct choice of product Educating consumers Ensuring distribution of the product Accept any other suitable aim or principle ANY5X2_ = (10) 7.6 7.6.1 WHEN IS ADVERTISEMENT UNETHICAL e When consumer is not protected against misrepresentation Vv e Conflicts with moral code of practice e Accept any other suitable comment. (2) 7.6.2 THREE EXAMPLES OF UNETHICAL ADVERTISING Misleading consumers/make misleading claimsvV Create false needs Cultural pollution Incorrect information on the products Criticize competitors Advertisements are of poor taste Influence the consumer emotionally Abuse the ability of children who do not understand the content of an advertisement e Accept any other unethical behaviour ANY3X2 (6) Copyright reserved Please turn over

Downloaded from hlayiso.com Business Economics/HG 21 DBE/2014 SCE - Memorandum 7.6.3 WHAT CAN PUBLIC DO ABOUT UNETHICAL ADVERTISING Complain to different regulating bodies which see to it that advertisements are not misleading or in bad taste.vV Such as: ASA/SABC/FASA/IMM/Press union/Etc. ¥ (3) [50] QUESTION | MARKS 71 9 7.2 4 7.3 8 7.4 8 7.5 10 7.6 11 TOTAL 50 Copyright reserved Please turn over

Downloaded from hlayiso.com Business Economics/HG 22 SCE - Memorandum QUESTION 8: FINANCIAL FUNCTION 8.1 8.2 8.3 DBE/2014 DIFFERENCE BETWEEN OWN AND BORROWED CAPITAL OWN CAPITAL BORROWED CAPITAL Consists of the capital contributed by the owners. vv Is the section of the total capital lent to the business. vV Normally these funds are not paid back to the owners These funds are usually paid back after a certain period of time. They differ in respect of the division of profits. A fixed interest rate is paid on these amounts. ACCEPT ANY OTHER SUITABLE DIFFERENCE. UNDER-CAPITALISATION Insufficient capital to expand VV Cannot function properly May be fatal to business Cannot pay expenses Lose customers Will have to reduce activities Any other suitable fact ANY 1X4 ANY 3X2 SHAREHOLDERS DEBENTURE HOLDERS Owners of the business VV Creditors of the business VV Contribute to own capital Contribute to borrowed / foreign capital Have a say in management Have no say in management Share in profits in form of dividends Do not share in profit — receive interest A register of shareholders is kept Register not always kept Receive dividends only when they are declared Receive interest irrespective of whether the business shows a profit ANY 3X2 ADVICE CANDIDATE MUST INDICATE CHOICE AND ONE REASON E.g. Choice: Shareholding VV Reason: She will be an owner in the business VV OR Choice: Debenture holding Reason: Receive interest even if no profit were shown Copyright reserved Please turn over (4) (6) (6) (4)

Downloaded from hlayiso.com Business Economics/HG 23 DBE/2014 8.4 8.5 8.6 8.7 SCE - Memorandum FIXED CAPITAL WORKING CAPITAL e Fixed capital is that portion of the | e Working capital is that portion of total capital used to purchase the total capital used to finance fixed assets VV current assets VV e Suchas land, buildings and e Such as stock and debtors equipment to be used to the best advantage of the business ACCEPT ANY OTHER SUITABLE DIFFERENCE. ANY1X4 (4) FOUR DISADVANTAGES OF STOCKPILING Large amounts of capital are engaged in stock VV Costs of storage space is high Insurance against theft and fire are high Stock may become obsolete Losses as a result of damage to stock are high Price fluctuations can result in products been sold at a lower price Any other suitable disadvantage ANY4X2 = (8) KEEPING CASH Precautionary motive vv e For unforeseen expenses VV Speculative motive «© To make use of profitable opportunities Transactional motive e To be able to finance all transactions by the business ANY 2 (2 X 2) (8) 8.7.1 LIQUIDITY The ability of a business - e to meet its short term cash demand VV e to have enough cash to pay current liabilities ANY1X2 = (2) 8.7.2 CURRENT RATIO e R184 000V : R40 000V = 4,6:1 Vv (One ¥ if one part is correct) (4) ACID-TEST RATIO e (R184 000 — R72 000) ¥ : R40000V =2,8:1 WW OR e (R112000)V_ : R40000V =2,8:1 VW (One if one part is correct) (4) [50] Copyright reserved Please turn over

Copyright reserved Downloaded from hlayiso.com Business Economics/HG 24 SCE - Memorandum DBE/2014 QUESTION _| MARKS 8.1 4 8.2 6 8.3 10 8.4 4 8.5 8 8.6 8 8.7 10 TOTAL 50 Please turn over

Downloaded from hlayiso.com Business Economics/HG 25 DBE/2014 SCE - Memorandum QUESTION 9: GENERAL MANAGEMENT 9.1 UNINTERRUPTED/CONTINUOUS/MASS PRODUCTION VV (2) e Large quantities with a limited varietyvV Continuous production — use conveyer belts VV Standard product — all identical Automation takes place — there are different workstations; with different production lines. Semi- and unskilled workers are used — specialisation takes place. Large constant demand needs constant production. Balanced capacity of machines — can be adjusted to produce more or less. Single purpose machines which are custom build. Stocks of raw material and finished products are relatively low. e Accept any other suitable characteristic / advantage Example: Bread; bread rolls V ANY2X2+1 = (5) BATCH PRODUCTION/INTERRUPTED VV (2) e This is the manufacturing of a wide variety of products, but in small or limited batches or quantities. VV e One range of products is completed before the production of another range starts. VV Use the same equipment to manufacture different batches. This production system is eminently suitable for products with a limited but stable demand. e Accept any other suitable characteristic / advantage Example: Range of cakes for small businesses ¥ ANY2X2+1 = (5) JOBBING/INTERRUPTED VV (2) e Baking is customised according to specific demand/taste/preference One order is completed before the start of another Higher cost per unit Less specialised equipment and rather generalised multi-purpose equipment are used in the production process. Accept any other suitable characteristic / advantage Example: Birthday cake for customer ¥ ANY 2X2+1 (5) Copyright reserved Please turn over

Downloaded from hlayiso.com Business Economics/HG 26 DBE/2014 SCE - Memorandum 9.2 FIVE SAFETY MEASURES IN GUEST HOUSE Offer special training to workers VV Supply protective clothing and accessories for cleaners and kitchen staff Draw up safety prescriptions Take measures to encourage tidiness/cleanliness Keep all utensils/equipment in predetermined places Have suitable facilities for employees — rest rooms Provide for emergency situations — have first aid equipment available Provide for fire — have fire drills in place and fire fighting equipment at hand Structural safety e Any other suitable measure ANY5X2 = (10) 9.3 9.3.1 PRIMARY COST © Direct labour cost/2 x R8 000/R16 000VV ¢ Direct material cost/2 500 x R35/R87 500 VV (4) 9.3.2 CALCULATION OF FIXED OVERHEAD COSTS e Salary of manager R12 000 ¥ e Salary of general assistant R3 500 V¥ e Depreciation and insurance R12 500 V e Rent R6 000 ¥ e TOTAL R34 000 vv (6) 9.3.3 EXAMPLE OF VARIABLE OVERHEAD COST e Indirect material vv e Electricity and water ANY1X2 = (2) 9.3.4 COST PER UNIT Primary cost = R16 000 + R87 500 = R103 500 ¥ Fixed overhead costs =R 34 000(v) Variable overhead costs (2 500 x R5) + R5 500 =R 18000 V Total production costs = R155 500 Cost per unit = R155 500 (v) /2 500 ¥ = R62,20 VW (7) [50] QUESTION | MARKS 9.1 21 9.2 10 9.3 19 TOTAL 50 Copyright reserved Please turn over

Downloaded from hlayiso.com Business Economics/HG 27 DBE/2014 SCE - Memorandum QUESTION 10: ADMINISTRATION AND GENERAL MANAGEMENT FUNCTIONS AND BUSINESS ENVIRONMENT 10.1 FIVE FACTORS INFLUENCING DECISION TO CENTRALISE Experience and training of staff. VV Standardisation. Competent managers. Distribution of offices in a geographical area. Nature and size of the business. More/better equipment readily available at one office Any other suitable reason ANY5X2 = (10) 10.2 MOTIVATION OF EMPLOYEES Assurance that they may continue to work VV Participation in the decision-making process Pleasant working conditions Promotion opportunities Recognition for good performance Opportunity to suggest renewal Purposeful leadership or management Humane treatment Reasonable instructions and good liaison/communication with workers Increase salaries Award bonuses Any other suitable motivation ANY5X2 = (10) 10.3 LEVELS OF MANAGEMENT ¢ General management/Executive management/Top level VV o Strategic decisions V o Responsibility — whole businessV e Heads of departments/Functional management/Middle level © Tactical decisions V o Responsibility — own department ¥ e Foremen/Supervisory management/lower level o Operational decisions ¥ o Responsibility — workers who perform duties V¥ (12) Copyright reserved Please turn over

Downloaded from hlayiso.com Business Economics/HG 28 DBE/2014 SCE - Memorandum 10.4 PROJECT ORGANISATION STRUCTURE Temporary structure VV Specialists are gathered in a team to plan only the building of the dam The team has one duty to perform — establish a new outlet A project manager is in charge The project manager has line authority over projects. The project staff work together as team only until the project is completed The staff returns to their functional areas once the project is completed OR MATRIX STRUCTURE e This structure is permanent. e The functional activities continue in the various functional areas. e Expert staff work on different projects including planning the building of the dam The functional managers have line authority in their departments. This organisation structure is present mainly in organisations where technical, engineering and scientific specialists work together on a project requiring special knowledge. ANY4X2 = (8) 10.5 FUNCTIONS OF CSIR e Assists in the development of products and services/Material resources. Focuses on community development. Renders a supporting service to manufacturing industries. Works on the technological development of new and better methods. Renders testing services. Makes new information regarding technological development available. Any other suitable service. ANYS5X2 = (10) [50] QUESTION | MARKS 10.4 10 10.2 10 10.3 12 10.4 8 10.5 10 TOTAL 50 Copyright reserved Please turn over

Downloaded from hlayiso.com Business Economics/HG 29 DBE/2014 SCE - Memorandum QUESTION 11: MISCELLANEOUS MARK THE FIRST FIVE ANSWERS TO THIS QUESTION 41.1 FIVE FUNCTIONS OF THE SABS ¢ Promote standardisation in industry and commercevV¥ e Prepare specifications and codes of practice e Provide facilities for the testing and examination of commodities and raw materials e Control the use of standardisation and distinctive marks Undertake education work in connection with standardisation Co-operate with the view to bring about standardisation in connection with commodities Promote national awareness of quality Determine standard of imported goods Accept any other suitable function of the SABS. ANY5X2 ~~ (10) 11.2 FIVE CHARACTERISTICS OF A PUBLIC COMPANY Minimum of seven shareholders VV (New = 1) Maximum depends on number of shares issued Managed by minimum of 2 directors (New=1) Separate legal entity Unlimited continuity Shareholders have limited liability It pays income tax The name ends in Limited (Ltd) Sells shares to the public Shares are freely transferable May begin operating once it has received a certificate to commence business Assets and liabilities are responsibility of the company The books must be audited Financial statements must be published Changes can only be done by special resolution Voting rights depend on number and type of shares Any other suitable characteristic ANY5X2 = (10) Copyright reserved Please turn over

Downloaded from hlayiso.com Business Economics/HG 30 DBE/2014 SCE - Memorandum 11.3 FIVE REQUIREMENTS OF A TRADE MARK e It will be approved by the public VV e {tcontains unique symbol, mark, graphic sign or word e It reflects the salient advantages/features/value of the products e.g. characteristics and utility. It could have versatile usage It is in good, simple language to be easily understood. Easily pronounced and remembered by consumers. Be distinct from names or trademarks of related products or competitors to avoid confusion. Easily registered to enjoy legal protection. It is not misleading Promote marketing mix of business Be adaptable to packaging and labelling requirements. Must be accepted and not irritate consumers Must be used unchanged for an extended product range Accept any other suitable requirement ANY5X2 = (10) 11.4 FIVE FUNCTIONS OF THE JSE e Protects investors with strict listing rules applied to listed companies VV e Encourages small investors/you to participate in the economic development of South Africa Serves as an important link between investors and entrepreneurs Offers facilities for financial institutions to invest their funds in shares Provides the opportunity for company shares to be assessed by a large number of professionals Publishes share prices daily/keep you informed of share prices Is a sensitive barometer of economic conditions and price tendencies Makes an important contribution to the economic stability and growth of South Africa e Offers the opportunity to convert an investment into cash relatively easily Accept any other suitable service ANY5X2 = (10) 11.5 FIVE DOCUMENTS THAT PROVE CREDITWORTHINESS Application form VV Status report from bank Evidence of other accounts Proof of employment and salary Proof of residential address Report from credit agency Any other relevant report/document ANY5X2 = (10) Copyright reserved Please turn over

Business Economics/HG 31 DBE/2014 Downloaded from hlayiso.com SCE - Memorandum 11.6 ADVANTAGES OF STOCKPILING They may have enough space for storage purposes. VV Specialised equipment is available. May receive discount on bulk purchases Save costs by ordering in large quantities Fewer delays in production Loss of sales is prevented Reduced effect of price changes Duplication of stock is eliminated. Deliveries take place on time. Easy to determine theft or obsolescence ANY5X2 = (10) 11.7 FIVE FUNCTIONS OF THE CHAMBERS OF COMMERCE To settle disputes amongst members by means of arbitration. VV To eliminate unnecessary competition between members. To study new municipal laws and regulations and bring it to the attention of members. To agitate for municipal laws and regulations which will favour commerce? To introduce uniform shop hours, wages and prices. To keep a blacklist of defaulters for their members. To present courses and seminars to members and their employees. To collect/analyze information and give advice to members. To render a specific service on behalf of a member. To promote trade in their area. To bring members in contact with organisations and institutions that may be able to assist them in their business. Accept any other suitable function ANY5X2 = (10) [50] QUESTION | MARKS 11.1 10 11.2 10 11.3 10 11.4 10 11.5 10 11.6 10 11.7 10 TOTAL 50 TOTAL SECTIONC: 200 GRAND TOTAL: 400 Copyright reserved