OCR A-Level Business H436 sample questions and answers (H436)
Guide overview All 7 topics Sample questions Papers and weighting Look inside Questions and answers
35 sample questions and answers
Taken from every topic of OCR A-Level Business H436, specification H436. The full guide has 2,383.
Component 01
Business Activity
326 questions in the guide, across 22 subtopics. More from this topic
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Buying, selling and adding value
Why must most businesses buy before they can sell?
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Almost every business has to pay for materials, stock, labour or equipment before it has anything to sell, which is why a start-up needs finance in place well before its first sale. -
Entrepreneurs and intrapreneurs
Why do entrepreneurs matter to the wider economy?
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New firms create jobs and tax revenue, introduce competition and innovation that push established businesses to improve, and serve gaps that larger firms find too small to bother with. -
SMART objectives and the usefulness of objectives
Why should an objective be time-based?
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A deadline creates urgency, allows progress to be reviewed part way through, and makes it possible to say whether the objective was met or merely postponed. -
Sole traders and partnerships
Why are professional firms such as solicitors and accountants often partnerships?
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The partners themselves are the product, so the firm needs their skills and judgement rather than large capital, and the structure lets senior professionals share ownership, profits and clients. -
Social enterprises and not-for-profit organisations
Give two legal forms a social enterprise in the UK can take.
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It can be set up as a community interest company or as a company limited by guarantee.
Component 01
Marketing
428 questions in the guide, across 29 subtopics. More from this topic
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The purpose of marketing and the unique selling point
How does marketing increase a business's sales revenue?
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Marketing raises awareness and persuades more customers to buy, and a stronger reputation lets the business sell more units or charge a higher price for each one. -
Primary research: questionnaires, focus groups and observation
What is one strength and one weakness of trialling a product before launch?
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It shows how the product performs in real use rather than how customers imagine it will, but it gives competitors early sight of the product. -
Market size, market share and market growth
A market has total sales of 2.5 million units and a firm holds an 18% share. How many units does the firm sell?
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The firm sells 450,000 units, because 18% of 2.5 million is 450,000. -
Segmenting a market into customer groups
How does segmentation allow a business to charge different prices?
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Segments differ in how much they value the product and what they can pay, so the business can charge a premium to the least price-sensitive group. -
Skimming, penetration and cost-plus pricing
What are two impacts of using penetration pricing?
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It builds volume and market share rapidly, but margins are very thin at first and customers may resist the later price rise.
Component 01
People
364 questions in the guide, across 24 subtopics. More from this topic
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Human resource management and workforce planning
Name three ways a business can close a shortfall in the labour it needs.
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It can recruit externally, train or redeploy existing employees, or take on temporary workers. -
Organisational design, flexibility and intrapreneurship
What are two signs that a business has outgrown its structure?
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Decisions take too long because too many people must approve them, and responsibilities either overlap or fall between roles so work is duplicated or missed. -
Authority, delegation and centralisation
What are two benefits of delegation to the manager who delegates?
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It frees their time for higher-value work, and it makes use of skills in the team that the manager does not have. -
Bonuses, profit sharing, pensions and fringe benefits
What is profit sharing?
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Profit sharing distributes an agreed share of the business's profit among its employees. -
Leadership, vision and company culture
What are two things a leader does to unite a team?
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Sets a shared goal that everyone's work contributes to, and deals with conflict and unfair treatment so people cooperate rather than compete.
Component 02
Operations
250 questions in the guide, across 18 subtopics. More from this topic
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The purpose of operations and the transformation process
State two differences between producing a good and providing a service.
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A good is tangible and can be stored, while a service is intangible and is usually produced and consumed at the same moment. -
Ways of adding value: convenience, branding, design and facilities
State two ways design can add value to a product.
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Design can make a product more attractive and easier to use, and it can reduce the quantity of material needed to make it. -
Automation, robotics and 3D printing in production
Why can automation improve quality as well as output?
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A machine repeats the same movement to the same specification each time, so variation between units and the defect rate both fall. -
Efficiency, effectiveness and productivity
A workshop makes 500 units a day at the lowest cost in its industry, but a third of them are the wrong specification. Is it efficient, effective, or neither?
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It appears efficient in its use of resources but it is not effective, because a third of its output does not do the job it was made for. -
Production quality: purpose and standards
Why does a business set minimum standards for its output?
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They keep the business within the law on safety and product description, and they stop variable output damaging the reputation of the brand.
Component 02
Finance
343 questions in the guide, across 24 subtopics. More from this topic
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The finance function and business failure
Why is a bank reluctant to lend to a firm that keeps poor financial records?
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It cannot judge whether the firm generates enough cash to meet the repayments, so the loan looks far riskier and is refused or priced higher. -
Cost behaviour and sales revenue
State the formula for total revenue.
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Total revenue = selling price per unit × quantity sold. -
Using contribution to make short-term decisions
Why should a firm working at full capacity usually refuse a discounted order?
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Meeting it would displace sales at the full price, so the contribution lost is greater than the contribution gained. -
Budget variances
Budgeted labour costs were £80,000 and actual labour costs were £74,500. State the variance and its type.
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There is a variance of £5,500, and it is favourable because the cost was lower than budgeted. -
Remedies for a cash flow shortage
How does delaying payment to suppliers help cash flow?
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It keeps cash in the business for longer, effectively borrowing from suppliers at no interest.
Component 02
External Influences
232 questions in the guide, across 16 subtopics. More from this topic
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Demand, supply and the market mechanism
Who makes up the demand side of a market?
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The demand side is made up of the consumers, households and other businesses that buy the product. -
Costs, capacity and the drivers of supply
Define productivity.
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Productivity is output per unit of input, most often measured as output per worker or per hour worked. -
Imports, exports and the case for open trade
How can exporting lower a manufacturer's unit costs?
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Selling abroad raises total output, so fixed costs are spread over more units and the business gains economies of scale. -
Exchange rates and the value of the pound
Sterling moves from £1 = €1.10 to £1 = €1.20. State whether this is an appreciation or a depreciation and calculate the percentage change.
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It is an appreciation of sterling of about 9.1%. -
The forces behind a globalised market
Name two developments in transport that have lowered the cost of international trade.
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The containerisation of shipping, and cheaper and larger-capacity air freight.
Component 03
Strategy, Risk and Managing Change
440 questions in the guide, across 31 subtopics. More from this topic
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Business planning and the reduction of risk
State what is meant by risk in the context of business planning.
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Risk is the chance that actual results differ from those expected, leaving the business with a loss it had not allowed for. -
SWOT analysis
Why does a SWOT analysis date quickly?
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It is a snapshot: opportunities are taken by rivals and new threats appear, so it must be repeated as conditions change rather than treated as permanent. -
Opportunity cost, risk and uncertainty in decision making
Give an example of a risk that a business can quantify.
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The chance of a machine breaking down, which can be estimated from maintenance records and is therefore something an insurer will price. -
Handy's four organisational cultures
Give one drawback of a role culture.
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It responds slowly to change, because procedures have to be rewritten first and nobody is expected to act outside their own job description. -
Judging an investment decision
Which technique gives a percentage that can be compared directly with the cost of borrowing?
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The average rate of return does, because it expresses average annual profit as a percentage of the sum invested.
OCR A-Level Business H436 Active Recall Guide
The other 2,348 questions, with the answers printed after each section.