CBSE Sample Papers for Class 12 Business Studies Paper 3 are part of CBSE Sample Papers for Class 12 Business Studies Here we have given CBSE Sample Papers for Class 12 Business Studies Paper 3.

CBSE Sample Papers for Class 12 Business Studies Paper 3

Board CBSE
Class XII
Subject Business Studies
Sample Paper Set Paper 3
Category CBSE Sample Papers

Students who are going to appear for CBSE Class 12 Examinations are advised to practice the CBSE sample papers given here which is designed as per the latest Syllabus and marking scheme as prescribed by the CBSE is given here. Paper 3 of Solved CBSE Sample Papers for Class 12 Business Studies is given below with free PDF download solutions.

Time: 3 Hours
Maximum Marks: 80

General Instructions

(i) Answer to questions carrying 1 mark may be from one word to one sentence.
(ii) Answer to questions carrying 3 marks may have about 50 to 75 words.
(iii) Answer to questions carrying 4 – 5 marks may have about 150 words.
(iv) Answer to questions carrying 6 marks may have about 200 words.
(v) Attempt all the parts of a question together.

Question 1:
In which type of plan, the sequence to perform a job is determined?

Question 2:
Rita wants to buy a packet of juice. As an aware customer, how can she be sure about the quality of juice she plans to buy?

Question 3:
There are several techniques for measurement of actual performance as a step of process of controlling. What does these techniques include?

Question 4:
Distinguish between functional structure and divisional structure on the basis of formation.

Question 5:
ABC Ltd, a reputed industrial machines manufacturer, need ₹20 crore as additional capital to expand their business. Mr Kunal, the Chief Executive Officer (CEO) of the company wants to raise funds through equity. The finance manager, Mr Amit, suggested that the share may be sold to investing public through intermediaries, as the same will be less expensive. The proposal was accepted.
Name the method through which the company decided to raise additional capital.

Question 6:
“Introducing a scheme of 50% + 40% less by Koutons,” is the example of which sales promotion technique?

Question 7:
A fashion design house has the following main jobs:
(a) Manufacturing
(b) Finance
(c) Marketing
(d) Personal
(e) Research and development
Which organisational structure will you prefer for this type of a company

Question 8:
The net income of XYZ Ltd is ₹10,20,000 and sales for the year are ₹70 lakh. The total investment in the business amounts are ₹90 lakh. Find out the return on investments for XYZ Ltd.

Question 9:
Identify the type of products in the following cases and give an example of each type.

  1.  Purchase of goods in which buyers devote considerable time to compare quality.
  2. Consumer products which are purchased frequently, immediately and with least time and efforts.

Question 10:
There are some barriers in communication which are concerned with organisational structure and regulations. Discuss briefly any three of its barriers.

Question 11:
Which institution is known as the watch dog of securities market in India?

Question 12:
Name the level of management, to which the following parts belong:

  1. Mr A is a purchase manager in XYZ Ltd.
  2. Mr A is a CEO in XYZ Ltd.
  3. Mr A is a superintendent in XYZ Ltd.

Question 13:
Explain the following features of planning:

  1.  Planning focuses on achieving objectives.
  2. Planning establishes standards for controlling.

Question 14:
Rahul, a worker, is given a target of assembling two computers per day. Due to his habit of doing things differently, an idea struck him which would not only reduce the assembling time of computers, but would also reduce the cost of production of computers. Rahul’s supervisor instead of appreciating him, ordered him to complete the work as per the methods and techniques decided earlier, as nothing could be changed at that stage.

  1. Identify the limitation of planning, as discussed in the above para.
  2. In addition to the above limitation, discuss three more limitations of planning.

Question 15:
Mrs Hansaben Shah had bought a silk saree from Alka Saree Center for ₹7,000. She wore the saree on a couple of occasions but even before a wash it started tearing on its own. She complained to the dealer who said good once sold could not be taken back nor refund was possible.

  1. What values of a customer are affected in this case?
  2. What right can be exercised by the buyer in this case?

Question 16:
The directors of Kashyap Ltd, an organisation manufacturing computers, wants to double the sales and have given this responsibility to their sales manager. The sales manager has no authority either to increase the sales promotion expenses or appoint new salesmen. Hence, he could not achieve this target.

  1. Is the sales manager responsible for not achieving the target?
  2. Which principle of management is violated here?
  3. State any two effects, if this principle is violated.

Question 17:
Discuss any four points highlighting the importance of delegation for an organisation.

Question 18:
What do you mean by working capital? Explain any three factors affecting the requirement of working capital.

Question 19:
On 8th November, 2016, Prime Minister Narendra Modi banned ₹ 500 and ₹ 1,000 currency notes by implementing demonetisation policy. In the context of this statement, explain any four features of demonetisation.

Question 20:
” An ideal control technique is the one that checks every bit of performance.” Comment.

Question 21:
National Optic Fibre Network (NOFN) Project, one of the most expensive and ambitious projects in India’s technology history, connects 2,50,000 Gram Panchayats in the country with a fibre optic network.

  1.  As per the reader’s view, the above project is associated to which dimension of business environment?
  2. How this project adds value to the society?

Question 22:
Blue Bell School believes in all round development of children, focusing both on academics and on sports and extra-curricular activities. Many students of this school have secured ranks at the state level in the board exams and also some of the students have excelled at the state and national games. One of the key reasons for such excellent performance of the students is that the school hires highly qualified teachers and pays them well. The school has presently vacancies for middle level classes. The internal sources have been exhausted. Explain any five sources of recruitment that the school can use for filling up these vacancies.

Question 23:
There are two companies B and D. Total contribution of capital is ₹40 lakh each. The ratio of equity to total capital in company B is ₹10 lakh and debt is ₹30 lakh while in company D, the total equity capital is ₹40 lakh, sourced through equity. EBIT is ₹8 lakh, the interest rate on debt is @ 10% and the tax rate is 30%. Which company enjoys favourable financial leverage?

Question 24:
Markfed Foods Pvt Ltd has appointed a new HR manager, who has completed his MBA from the most renowned institution in India. He was a gold medalist and has also been acknowledged as the best employee during his internship in a firm. Soon after his joining, the management noticed a drastic change in the attitude of workers towards their work.
They were willing to accept new challenges, take up more challenging jobs and were able to achieve targets efficiently and effectively. Soon, the company prospered and established its name in the market. On being enquired, he confessed that all this change is attributed to Maslow’s Theory of Motivation. Briefly explain Maslows Need Hierarchy Theory and also state the assumptions on which it is based.

Question 25:
What do you mean by channels of distribution? What functions do they play in the distribution of goods and services? Explain.


Answer 1:
Procedure is one of the types of standing plan which determine the sequence to perforn a job.

Answer 2:
Rita should look for FPO mark on the packet, which is a quality indicator for beverages.

Answer 3:
It includes sample checking, personal observation and preparing performance reports.

Answer 4:
Difference between functional structure and divisional structure is:

Basis Functional Structure Divisional Structure
Formation It is formed on the basis of functions. It is formed on the basis of various product lines which is further supported by functions.

Answer 5:
Offer for sale is the method through which the company decided to raise additional capital.

Answer 6:
The name of sales promotion technique is discount.

Answer 7:
Functional organisational structure will be suitable for this type of organisation.

Answer 8:
Return on Investment = \(\frac { Net Income }{ Total Investment }\) x 100 = \(\frac { 10,20,000 }{ 90,00,000 }\) x 100 = 11.33%

Answer 9:
(i) Shopping Products They are the products that require considerable time and effort e.g. Colour TV, jewellery, etc.
(ii) Convenience Products These products require minimum time and effort and are purchased frequently by the customers e.g. Salt, soap, toothpaste, etc.

Answer 10:
The three organisational barriers are as follows:

  1. Organisational Policy Communication is hampered, if the policy of an organisation does not support the freeflow of communication.
  2. Status Status of a superior may create a psychological distance between him and are his subordinates. A status conscious manager does not easily communicate with his subordinates.
  3. Rules and Regulations Rigid rules and cumbersome procedures act as a barrier to effective communication. Communication through the prescribed channels may result in delays.

Answer 11:
Securities Exchange Board of India (SEBI) is the watch dog of the securities market. It performs various functions to regulate and protect the interests of investors while dealing with securities.
The functions performed by SEBI to facilitate this role are as follows:

  1. Registration of brokers and sub-brokers in the market.
  2. Registration of collective investment schemes and mutual funds.
  3. Controlling takeover bids and imposing penalties for such practices.
  4. Prohibition of fraudulent and unfair trade practices.

Answer 12:
(i) Middle Level This level includes head of the departments such as purchase manager, finance manager, etc.
(ii) Top Level This level includes chief executives, managing directors, etc.
(iii) Operational Level This level includes foreman, inspectors, superintendent, etc.

Answer 13:
(i) Planning Focuses on Achieving Objectives Planning involves the determination of activities required to be undertaken to achieve objectives of organisation. Thus’, it can be said that it focuses on achieving objectives.
(ii) Planning Establishes Standards for Controlling Planning involves setting-up of objectives, which act as the standards against which actual performance is measured. This helps in finding deviations and taking corrective action in the controlling process.

Answer 14:

  1. As per the above mentioned para, the limitation highlighted is‘planning reduces creativity’.
  2. The other three limitations of planning are:
    • It involves huge costs i.e., it usually involves a lot of time, effort and cost of managers.
    • Success of planning rests on its implementation. Lack of proper implementation may lead to failure of planning. Thus, planning does not guarantee success.
    • A specific plan made in an organisation clearly indicates the objective to be achieved and ways of doing work. Since, a manager may not be able to change these plans, it leads to rigidity.

Answer 15:
(i) Emotional and economic values of a customer are affected in this case, as she purchased an expensive saree and wore it only on a couple of occasions.
(ii) Right to Seek Redressal As per the Consumer Protection Act, the consumer has a right to get relief in case the product falls short of his/her expectations. Several reliefs are available like removal of defect in the product, compensation paid for any loss, etc. So, she can exercise this right and can raise her voice against the dealer.

Answer 16:
(i) No, the sales manager is not responsible because he was not given authority to increase the sales promotion expenses.
(ii) The principle of authority and responsibility is being violated in the given case.
(iii) Two effects of violating this principle are stated below:
(a) Subordinates will not be able to complete the task effectively (in time).
(b) Violation of this principle may lead to delay in decision-making.

Answer 17:
Delegation of authority is important for an organisation because of the reasons discussed below:
(i) Motivation of Employees Delegation provides a feeling of status and recognition to subordinates, as it is not only a process of sharing workload, but also involves trust of the superior on his subordinate. Entrustment of responsibility builds up his esteem and encourages him to perform better.
(ii) Facilitation of Growth Delegation helps in the expansion of an organisation by providing a ready workforce to take up leading positions in new ventures. Trained and experienced employees are able to play significant role in launching new projects of the organisation.
(iii) Basis of Management Hierarchy Delegation of authority establishes superior-subordinate relationships, ’ which are the basis of hierarchy of management. This helps employees to know ‘who has to report to whom’.
Thus, duties and powers of each individual becomes clear.
(iv) Better Coordination The elements of delegation namely authority, responsibility and accountability helps to define the powers, duties and responsibilities related to various positions in an organisation. This helps to avoid overlapping and duplication of work and facilitates coordination, as it gives a clear picture of the work being done at various levels.

Answer 18:
Working Capital The capital invested in current assets such as stock of materials and finished goods, accounts receivable, bills receivable and bank balances for meeting day-to-day expenses is known as working capital.
Factors affecting the working capital requirements are:

  1. Nature of Business A trading organisation and a service industry firm usually needs a smaller amount of working capital as compared to a manufacturing organisation.
  2. Scale of Operations Organisations which operate on a large scale, their quantum of inventory and debtors required is generally high. Such organisations, therefore, require large amount of working capital as compared to the organisations which operate on a lower scale.
  3. Credit Availed Just as a firm allows credit to its customers, it also may get credit from its suppliers. To the extent, it avails the credit on purchase, the working capital requirements is reduced.

Answer 19:
Features of demonetisation are as follows:

  1. It is a radical monetary step in which a currency unit’s status as a legal tender is declared invalid.
  2. It usually occurs when their is a change in currency by the government.
  3. It is an attempt to make a cashless, corruption free and digital society.
  4. It is a strict measure by the government against tax evasion.
  5. It helps in channelising more savings into the formal financial system.

Answer 20:
This statement is not true. An ideal control system should concentrate on key aspects of performance. There are several activities to be controlled. In practice, it is not possible for management to control each and every activity due to limited time.

Moreover, minor deviations from plans and targets are insignificant for success. Therefore, an attempt to control everything is likely to be a futile exercise. Control system should focus attention on exceptional and key factors only. This will help to save time, efforts and money. Thus critical point control is an ideal technique where focus is on the key result areas.
On the other hand, controlling each and every activity results in delays, increased cost and neglect of key items. The control system should be designed in such a manner that only significant deviations from the standards are reported to the higher level managers. Thus, management by exception technique should be followed and deviations within an acceptable range should be ignored.

Answer 21:

  1. (a) The National Optic Fibre Network (NOFN) Project of government is associated with political, social, technological and economic environment, as this project will satisfy the social needs of people, as well as, provide them opportunities of jobs, impressive wages, etc.
    (b) Secondly, it connects the villages with a fibre optic network, which depicts the best example of innovations or advancement of technologies.
    (c) The National Optic Fibre Network (NOFN) Project is being overseen by a new entity called Bharat Broadband Network Limited (BBNL) and is being executed by BSNL and Mahanagar Telephone Nigam Limited (MTNL).
    This project will prove to be beneficial not only for villagers but from this, persons involved in testing, civil work, logistics, local vendors, antenna- suppliers, technicians will also feel benefitted and will be able to satisfy their basic needs.
  2. This project adds following values to the society:
    (a) Raising of standards of living and development of society.
    (b) Employment opportunities and economic development in rural areas.

Answer 22:
For filling up the vacant posts, following five external sources of recruitment can be used:
(i) Direct Recruitment Under direct recruitment, a notice is placed on the notice board of the enterprise specifying the details of the jobs available. Job seekers assemble outside the organisation on the specified date and selection is done on the spot. This source may be used for the office staff, teachers and primary teachers.
(ii) Advertisement Advertisement in newspaper is generally used when wider choice is required. The advantages of advertising vacancies is that more information about the organisation and job can be given in the advertisement. It gives the management a wider range of candidates from which to choose.
(iii) Employment Exchange Employment exchanges run by the government are regarded as a good source of recruitment. It helps to match personnel demand and supply by serving as a link between job seekers and
(iv) Recommendations of Employees Employees of an organisation recommend the names of their friends, relatives and neighbours, which prove to be a good external source of recruitment. It is a reliable source as the background of the suggested candidate is well known.
(v) Web Publishing Internet is becoming a common source of recruitment these days. There are many website?, like, monster, com, etc designed to provide information to both job seekers and employers.

Answer 23:
As per the given details, company enjoying the favourable financial leverage can be identified as below:

Particulars Company B (₹) Company D (₹)
Equity @₹ 100 each 10,00,000 40,00,000
Loan @ 10% p.a. 30,00,000
Total Capital 40,00,000 40,00,000
EBIT 8,00,000 8,00,000
(-) Interest @ 10% (3,00,000)
EBT 5,00,000 8,00,000
(-) Tax @ 30% (1,50,000) (2,40,000)
3,50,000 5,60,000
EPS 35% 14%

Company B is in the position of favourable financial leverage as use of debt increases the EPS and thus, the situation is considered as favourable for trading on equity.

Answer 24:
Maslow’s Need Hierarchy Theory of Motivation was given by Abraham Maslow. It is based on human hierarchy of five needs which are depicted and explained below:
CBSE Sample Papers for Class 12 Business Studies Paper 3 img24
(i) Basic Physiological Needs These are the basic needs, which a person is required to satisfy in order to survive. Hunger, thirst, shelter and sleep are some of the examples of these needs. In an organisation, basic salary helps to satisfy these needs.
(ii) Safety/Security Needs These needs are concerned with physical, economic and social security, in the form of job security, stability of income, etc.
(iii) Affiliation/Belongingness/Social Needs These needs are concerned with affection, sense of belongingness acceptance and friendship. It is fulfilled when employees have cordial relations with colleagues.
(iv) Esteem Needs These needs include factors such as self-respect, status and recognition. When these needs are fulfilled through job title, it enhances self-confidence and prestige of employees.
(v) Self-actualisation Needs It is the highest level of need in the hierarchy. It arises after the satisfaction of all previously discussed needs. These needs include growth, self-fulfilment and achievement of goals.

Assumptions of Maslow’s Need Hierarchy Theory
The main assumptions of Maslow’s need hierarehy theory are :

  1. People’s behaviour is based on their needs. Satisfaction of such needs influences their behaviour.
  2. People’s needs are hierarchical in order. They start from basic physiological needs and reach to high level needs.
  3. A satisfied need can no longer motivate a person, only next higher level need can motivate a person.
  4. A person moves to the next higher level need, only when the lower level need is satisfied.

Answer 25:
Channels of Distribution Channels of distribution are set of individuals and firms that take title or assist in transferring title of particular goods and services as they move from producers to consumers, it refers to a team of merchants, agents and business institutions that combine physical movement and title movement of products.

Functions of Channels of Distribution Channels of distribution smoothen the flow of goods by creating possessions, place and time utilities. Some important functions performed by them are:

  1. Sorting It refers to the process of sorting the product into homogeneous groups on the basis of size, quality, features and price.
  2. Accumulation It refers to the process of accumulation of goods into larger homogeneous stocks. This helps to maintain a continuous flow of supply.
  3. Allocation It involves breaking homogeneous stocks into smaller and marketable lots. This helps in making sales easily according to different requirements of different buyers.
  4. Assorting It refers to the process of combining various goods of the same line of product, for sale to customers such as a cricket kit containing a bat, a ball, gloves, wickets, stumps, helmet and leg guards.

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