CBSE Sample Papers for Class 12 Business Studies Paper 6

CBSE Sample Papers for Class 12 Business Studies Paper 6 are part of CBSE Sample Papers for Class 12 Business Studies Here we have given CBSE Sample Papers for Class 12 Business Studies Paper 6.

CBSE Sample Papers for Class 12 Business Studies Paper 6

Board	CBSE
Class	XII
Subject	Business Studies
Sample Paper Set	Paper 6
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 6 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:
Which function of management involves setting objectives and developing appropriate course of action to achieve these objectives?

Question 2:
Jayesh is working as a supervisor in a company. Due to his hardwork, he is promoted to the post of production manager. Now the post of supervisor is vacant and no one can be transferred or promoted to this post. Name the source of recruitment the company will use to fill up this post.

Question 3:
Explain the meaning of noise in the process of communication.

Question 4:
Apian is framed, implemented and followed by another plan and so on. Mention the feature of planning indicated here.

Question 5:
There are many redressal machinery under Consumer Protection Act who protect the consumers. Name any two such consumer grievance agencies.

Question 6:
State any two advantages of free rein leadership.

Question 7:
The operations manager of Zen Back Ltd, set a limit of 8% deviation in production and decided to take corrective action only if deviations occurred beyond 8%. Name the controlling principle applicable here.

Question 8:
the capital structure of a company is given as:
Equity = ₹25,00,000
Debt = ₹15,00,000
Find out the financial leverage for the above company.

Question 9:
Mansi, a shoe manufacturer for school students, decided to maximise her profit by producing and distributing at large scale and thereby, reducing the average cost of production.
(i) Identify the marketing management philosophy adopted by Mansi.
(ii) Explain this philosophy on the basis of
(a) Main focus
(b) Means and ends

Question 10:
The finance manager of Aerial Automobiles has made a detailed plan analysing the minutest financial needs of the firm in the coming six months. He also analyses the sources from where such fund requirement will be met.
(i) Name the process the finance manager is involved in.
(ii) Explain any two essential requirements of a sound financial plan.

Question 11:
How do principles of management provide useful insights into reality? Explain.

Question 12:
Differentiate between delegation and decentralisation.

Question 13:
” A leader who has only good physical features and required knowledge and competence cannot inspire others to work.” Then what else is required by a leader to be successful? Explain by giving three points.

Question 14:
Explain any four impacts of government policy changes on business and industry.

Question 15:
XYZ Power Ltd set-up a factory for manufacturing solar lanterns in a remote village as there was no reliable supply of electricity in rural areas. The revenue earned by the company was sufficient to cover the costs and the risks.
The demand of lanterns was increasing day-by-day, so the company decided to increase production to generate higher sales. For this, they decided to employ people from the nearby villages as very few job opportunities were available in that area. The company also decided to open schools and creches for the children of its employees.

Identify and explain the objectives of management discussed above.
State any two values which the company wanted to communicate to the society.

Question 16:
A furniture manufacturer gets an order of manufacturing 100 chairs. He has six workers, who will do the work. Each and every worker is specialised in completing one task only. One is good in cutting, second is good in shaping, third is good in finishing and so on.

If he wants to complete the target on time, which principle will help him?
What benefit company will have, by opting for this principle?

Question 17:
Being a management guru, you feel that the adopted plan is not suitable for company’s growth. Suggest an ideal plan for your company and briefly discuss its characteristics.

Question 18:
“Money is not the only motivator”, then what else is required to motivate employees? Explain by giving any four points.

Question 19:
Explain the meaning of controlling. State some of its objectives.

Question 20:
Betal Qroup is a leading producer of ‘Pan Bahar Pan Masala’. In order to promote its product it is using slogan ‘Come Alive’. They have also prepared an advertisement featuring leading actors and actresses of bollywood who are shown to be great patrons of the product. The advertisement, in addition to be misleading, is also not showing the statutory warning “Pan masala chabana swasthya ke liye hanikarak hai.”

Which values are overlooked by the promoters?
What are the drawbacks of advertisement being portrayed in this case?

Question 21:
Financial management is concerned with inflow and outflow of money, do you agree? Give some significance of financial management.

Question 22:
What are the first five steps involved in staffing process?

Question 23:
You are asked to design a label for a Coco Love, a new chocolate launched by CC company. Mention what factors will you keep in mind and furnish the information on the label of the product.

Question 24:
Mr Sahil and Mr Rajesh are promoting a new company. They are not able to decide on, how to raise funds.
Sahil is interested in a new issue through prospectus, while Rajesh wants a right issue.

As a financial manager, suggest Sahil and Rajesh for the appropriate decision.
Discuss the methods by which securities are issued in the primary market.

Question 25:
Mrs Leena Mehta works as a corporate event coordinator in an event management company. She has been made an overall official incharge for organising a painting exhibition for one of the clients of the company. For ensuring that the exhibition takes place successfully, she identifies the various activities involved and divides the whole work into various task groups like marketing committee, decoration committee and reception committee. In order to facilitate coordination within and among committees, she appoints a supervisor of each group. Each member is asked to report to their respective supervisors and all the supervisors are expected to work as per her orders. In context of the above case:

Identify and define the function of management being performed by Mrs. Leena.
Describe briefly the various steps involved in the performance of the function of management as identified in part (a) of the question.

Answers

Answer 1:
Planning function involves setting objectives and developing appropriate course of actions to achieve these objectives.

Answer 2:
Company will use external source of recruitment.

Answer 3:
Noise means an obstruction or hindrance in the communication process, e.g. A poor telephone connection or an inattentive listener.

Answer 4:
The feature of planning indicated here is that planning is a continuous process.

Answer 5:
Two consumer grievance agencies are stated below:

District forum
State commission

Answer 6:
Two advantages of free rein leadership are stated below:

It provides maximum scope for development of subordinates.
It helps in full utilisation of the potential of subordinates.

Answer 7:
The controlling principle applicable here is management by exception.

Answer 8:
Calculation of financial leverage of the company as follows:
financial leverage = \(\frac { Debt }{ Equity }\) = \(\frac { 15,00,000 }{ 25,00,000 }\) = 0.6

Note : Financial leverage can also be computed by using the following formula:
\(\frac { Debt }{ Debt + Equity }\)

Answer 9:
(i) Mansi adopted the production concept. The focus of business activities was on production of goods as the demand for goods started picking up as the supply was low. Thus, it was believed that profit could be maximised by producing at large scale, thereby, reducing the average cost of production.

(ii) (a) The main focus of production concept is on quantity of product.
(b) Availability and affordability of product is the means and profit through volume of production is the end.

Answer 10:
(i) The financial manager is involved in financial planning.
(ii) Following are the two essential elements of a sound financial plan:
(a) A sound financial plan should help in facilitating the collection of optimum funds.
(b) It should be able to tap appropriate sources at the appropriate time. Thus, it helps in fixing the most appropriate capital structure.

Answer 11:
Principles of management are the statements of fundamental truth that explain the relationship between variable factors. These principles serve as guidelines for decision-making of managers. Management principles are important as they provide useful insights into reality. The principles of management help the managers to increase their efficiency by increasing their knowledge and ability to understand the situations. They help the managers to learn from the past mistakes and conserve time by taking wise decisions quickly
e.g. A manager can give his authority of taking day-to-day decisions to his/her subordinate and deal only with exceptional situations, which require his/her expertise by following the principle of delegation of authority.

Answer 12:
Difference between delegation and decentralisation are:

Basis	Delegation	Decentralisation
Purpose	Purpose To lessen the burden of the manager.	To increase the role of the subordinates in the organisation by giving them more autonomy.
Scope	It has narrow scope as it is limited to superior and his immediate subordinate.	It has wider scope as it implies extension of delegation to the lowest level of management.
Status	It is a process followed to share tasks.	It is the result of the policy decision of top management.
Nature	It is a compulsory act because no individual can perform all the tasks on his own.	It is an optional policy decision. It is done at the discretion of the top management only.

Answer 13:
Apart from good physical features, required knowledge and competence, a leader requires many other qualities which are as follows:

Good Communication Skills A leader requires good communication skills so that he can explain his ideas, guide and motivate his followers. He needs to be a good listener too.
Initiative The leader does not wait for others but takes the first step and creates opportunities.
Motivation Skills He should be able to influence the actions of people through proper motivation.

Answer 14:
Following are the four impacts of government policy changes on business and industry:

Increasing Competition Changes in the rules of industrial licensing resulted in entering of foreign firms which has increased the competition for Indian firms. „
Need for Developing Human Resource The new market conditions require trained, committed personnel. Hence, the need for developing human resources arises.
Market Orientation It implies that after the changes in government policy, the firms first have to study the market and then produce the goods accordingly.
Loss of Budgetary Support to the Public Sectors Public sectors have less of budgetary support from the Central Government. Now, they have to generate their own resources and be more efficient in order to survive and grow.

Answer 15:
(i) It is related with the social objective of management. It deals with the commitment of an organisation towards society. Such objectives may relate with producing eco-friendly products, providing employment to the weaker sections of the society, etc.
By covering the costs and risks, the company has also achieved the organisational objectives. This objective is related with three aspects:

Survival Ensure the continuity of business operations.
Profit Earn a reasonable profit, which covers the costs and risks of the business.
Growth It ensures the success of business in the long-run.

(ii) Firstly, by manufacturing solar lanterns, company gives due value to the needs of the rural people, as they will be able to enjoy electricity in their respective areas. Secondly, by giving employment, they will raise the standard of living of rural people.

Answer 16:

Division of work is suitable for the above mentioned case, as this principle states that the whole work is divided into small tasks and should be assigned to the persons as per their capabilities and experience. This results in timely completion of work and leads to specialisation.
When workers are performing the task as per their specialisation, this will result in increased efficiency, reduced wastages, specialisation and timely completion of work.

Answer 17:
An ideal plan should be effective, simple and should make the objectives of an organisation clear.
It helps in achieving the targets, reduces the risk of uncertainty, helps in coordination and encourages innovation and creativity.

Some main characteristics are:

Clarity The objectives and goals to be achieved should be clearly defined.
Practicability The plan should be based on facts and their implementation should be possible.
Flexibility A plan should be flexible, so that it can adopt the changes.

Answer 18:
“Money is not the only motivator.” This statement is true in this context that an individual has certain psychological, emotional and social needs. Money cannot satisfy them.

In order to satisfy these needs, following non-financial incentives are required:

Promotion If an individual gets promotion in the organisation, it satisfies him psychologically as he gets a feeling that his hardwork is recognised.
Job Security Every individual needs stability in terms of future income, job, etc. If their job is secure, they do not feel worried and work with greater zeal.
Employee Participation It means involving employees in decision-making process. This kind of programmes motivate employees and they feel that their suggestions are of worth.
Employee Recognition Programmes It means acknowledgment for participation. If an employee has performed well then a certificate or momentum should be presented to him. This will motivate him to perform better in future also.

Answer 19:
Controlling is an important managerial function. It is concerned with taking preventive actions against deviations. It is the process, through which managers assure that the actual activities conform to the planned activities. Controlling has a very wide scope. It does not end only by comparing the actual performance with planned performance, but it tries to find the reasons and solutions for such problems also.

The main objectives of controlling are :

It ensures that work is carried on as per the planned targets.
It enables managers to find out deviations/errors, thus providing direction for the work to move on the right track.

Answer 20:
(i) Promoters are overlooking the social and moral values in order to promote their product. Firstly, they are neglecting the health of the people and secondly, they are adopting unfair advertising practices.

(ii) Following are the drawbacks which are evident in this case :

Effect on Values and Life Style In this case, they are using slogan ‘Come Alive’ for tobacco. How can a person come alive after using tobacco? It affects the social values of a customer and just for a style symbol, one can start using it after watching such promotional advertisements.
Encourage Sale of Hazardous Products Just because of advertisement, anything can be sold in the market. The customers get attracted to such an advertisment and start purchasing the product without considering the drawbacks of the products as in the advertisement only attractive features are highlighted.
Not Providing True Information As per the legal compulsion, it is necessary to show the statutory warning that “Pan masala chabana swasthya ke liye hanikarak hai.” But in the advertisement, they are neglecting this crucial issue and conveying wrong information about the product.

Answer 21:
Yes, it is concerned with inflow and outflow of money and taking decisions regarding procurement and utilisation of funds.

The importance of financial management are discussed below:

Sound financial plan facilitates the smooth functioning of operations in an organisation.
Finance is required at every stage and for performing activities like distribution, promotion, production, etc. Through financial management, one can analyse the need and requirement of finance to carry out operations.
Financial management provides complete coordination between various functional areas such as marketing, production, etc to achieve organisational goals. If financial management is defective, the efficiency of all other departments cannot be maintained.
Financial management provides scientific analysis of all the facts and figures, through which it helps in taking decisions.
Financial management plays a very important role in the success of the business organisation by advising the top management on the solutions to various financial problems.
Thus, we can say that financial management plays a key role in the success of business.

Answer 22:
Following steps are involved in the staffing process:

Estimating the Manpower Requirements It implies that company estimates the number and types of employees needed. It also analyses what type of skills, educational background, etc is required to perform a job.
Recruitment After estimating the number and type of candidates, second step is to search the prospective employees and stimulating them to apply for the job.
Selection It is the process of choosing the best among the available or we can say choosing the most suitable candidate to fill a vacant job.
Placement and Orientation Placement implies occupying of post by the candidate for which he is selected and orientation means introduction of new employees to the existing employees.
Training and Development These involve improving job knowledge, skills and attitudes of employees on a regular basis so that they may perform their jobs efficiently.

Answer 23:
Labelling is the process of putting label on the product. Generally, the producer is at liberty to choose the kind of label. But, it has been made compulsory by the government to use label for some products. Besides this, the description of label has also been fixed, e.g. It is mandatory to use the label along with its stipulated information on medicines and processed food.

A good label should provide the following information:

Name and address of the producer/dealer.
Weight and measurement of the product.
Size, color and appearance of the product.
Raw materials used in production.
Directions for the proper use of the product and cautions against misuse.
Date of packing and date of expiry.
Maximum retail price including local taxes.

Answer 24:
(i) The issue of shares through prospectus is appropriate, as suggested by Sahil, as a new company cannot issue right shares because this can only be done by existing companies. 0
(ii) There are various methods by which securities are issued in the primary market. They are:

Offer Through Prospectus/IPO Under this method, a company invites public to subscribe for its shares through issue of prospectus, which makes a direct appeal to investors to invest in the company, through an advertisement in the newspapers and magazines.
Offer for Sale Under this method, securities are not issued directly to the public, but are offered for sale through intermediaries like issuing houses or stock brokers.
Private Placement Private placement is the allotment of securities by a company to institutional investors and some selected individuals. It is considered beneficial because it helps to raise funds more quickly than a public issue.
Rights Issue This is a privilege given to existing shareholders to subscribe to a new issue of shares according to the terms and conditions of the company. The shareholders are offered the right to buy new shares in proportion to the number of shares they already possess. This right is called the pre-emptive right of the existing shareholders.
e-IPOs When the public issue is made through an online system of stock exchange, it is known as e-IPO, i.e. electronic Initial Public Offer.

Answer 25:
The function of management being performed by Mrs Leena here is organising.
Organising can be defined as a process that initiates implementation of plans by clarifying jobs and working relationships and effectively deploying resources for attainment of organisational objectives.

According to Henry Fayol, “To organise a business is to provide it with everything useful to its functioning : raw materials, machines, tools, capital and personnel.”
1. Identification and Division of Work The first step in the process of organising is to identify and divide the work into small and manageable activities so that duplication of work, resources and efforts can be avoided and the burden of work can be shared among the individuals working in the organisation.

2. Departmentalisation After the work has been identified and divided, the next step is to group the similar or related activities (jobs) into larger units called departments or divisions. This process is called departmentalisation. Departmentalisation facilitates specialisation and can be created on the basis stated below:

Functions (purchasing, marketing, finance, etc)
Products (cosmetics, garments, baby products, etc)
Territory (East, West, North, South)

3. Assignment of Duties After the formation of departments, the next step is to assign or allocate work to the member of each department. The work is allocated to the members on the basis of their skills, ability and competencies. The work must be assigned to those who are best fitted to perform it well.

4. Establishing Reporting Relationships Merely allocating work is not enough. Each individual working in the organisation should also know from whom he/she has to take orders and to whom he/she is accountable. This will help in creating a hierarchical structure and help in coordination amongst various departments.

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