This page holds eleven original questions in rising difficulty, moving from classification and arithmetic to judgement. Every answer is worked in full so you can compare your method, not just your result.
Attempt each question on paper first, then open the answer. Each topic also has its own practice set in its module, reached from the Business learning guide, and the original mixed-practice builder can build a longer session.
The case used throughout
Kedai Roti Seri is a small bakery run by Zul. It pays rent of RM2,000 a month. Ingredients cost RM1.20 per loaf. A loaf sells for RM4.50. At present it makes and sells 1,500 loaves a month, and with its new mixer it can make up to 1,800.
How to use the set
- Cover the answer and write your own on paper, including units.
- Open the answer and mark each line, not only the final figure.
- Note the first line where you differ and the cause, then use the table at the end.
Questions
Question 1 (starter). Zul buys timber and makes wooden display shelves for the bakery. In which sector is this activity?
Show answer
It is the secondary sector. Secondary activity turns materials into goods, and making shelves from timber is manufacturing. Growing or cutting the timber would be the primary sector, and selling the shelves would be tertiary.
Question 2 (starter). Zul has RM8,000 to spend. Buying a second oven would add RM2,500 a year to profit. An online advertising campaign would add RM1,800 a year. Keeping the money in savings would earn RM240 a year. He chooses the oven. What is the opportunity cost?
Show answer
The opportunity cost is the most valuable alternative given up, which is the advertising campaign, worth RM1,800 a year. It is not the RM8,000 itself, and it is not the savings, because the campaign is the better of the two options he did not choose.
Question 3 (core). Work out the monthly profit of Kedai Roti Seri at 1,500 loaves.
Show answer
- Revenue = 1,500 × 4.50 = RM6,750.
- Variable costs = 1,500 × 1.20 = RM1,800.
- Fixed costs = RM2,000.
- Total costs = 1,800 + 2,000 = RM3,800.
- Profit = 6,750 − 3,800 = RM2,950.
Question 4 (core). Calculate the break-even output and the margin of safety at 1,500 loaves.
Show answer
- Contribution per loaf = 4.50 − 1.20 = RM3.30.
- Break-even = 2,000 ÷ 3.30 = 606.06 loaves.
- A part-loaf cannot be sold, and 606 loaves give 606 × 3.30 = RM1,999.80, which is just short of RM2,000. So break-even is 607 loaves.
- Margin of safety = 1,500 − 607 = 893 loaves.
Question 5 (core). With the new mixer, the bakery makes 1,800 loaves a month with the same 3 staff as before, when 3 staff made 1,500. Calculate the change in labour productivity.
Show answer
- Before: 1,500 ÷ 3 = 500 loaves per worker.
- After: 1,800 ÷ 3 = 600 loaves per worker.
- Change: (600 − 500) ÷ 500 = 20%, so productivity rose by 20%.
Question 6 (core). A café orders a wedding-cake batch worth RM2,400 on 45-day credit. The ingredients for it cost RM900, paid this month. What is the profit on the order, and what is the effect on cash this month?
Show answer
- Profit on the order = 2,400 − 900 = RM1,500.
- Cash this month: RM900 has gone out and RM0 has come in, so cash is RM900 lower until the café pays in 45 days.
The order is profitable but creates a temporary cash shortage. The cash versus profit bridge lets you try other payment timings.
Question 7 (core). Last year Zul’s shop had revenue of RM90,000, cost of sales of RM54,000 and net profit of RM9,000. Calculate the gross profit margin, the net profit margin and the mark-up on cost.
Show answer
- Gross profit = 90,000 − 54,000 = RM36,000.
- Gross profit margin = 36,000 ÷ 90,000 = 40%.
- Net profit margin = 9,000 ÷ 90,000 = 10%.
- Mark-up on cost = 36,000 ÷ 54,000 = 66.67%.
Same gross profit, but a different denominator, so margin and mark-up differ. The ratio tool shows the trace.
Question 8 (harder). Zul surveys 40 people leaving a school gate at 1 pm on a weekday to decide whether to open a breakfast stall. State the type of data and one limitation of the sample.
Show answer
It is primary data, because Zul collected it first-hand. A limitation is that 40 people is a small sample taken from one place and time, mostly students and school staff, so it may not show what working adults buying breakfast would want. A sample closer to his possible customers would be more reliable.
Question 9 (harder). A supermarket sells similar bread at RM4.20. Zul thinks of raising his price from RM4.50 to RM5.50. Explain one disadvantage, and find the lowest monthly sales that would keep total contribution at its present level.
Show answer
Disadvantage. At RM5.50 his loaf would cost RM1.30 more than the supermarket’s (5.50 − 4.20), so price-sensitive customers may switch and volume could fall.
Break-even on the change.
- Present contribution = 1,500 × 3.30 = RM4,950.
- New contribution per loaf = 5.50 − 1.20 = RM4.30.
- Sales needed = 4,950 ÷ 4.30 = 1,151.2, so 1,152 loaves.
- This is a fall of 1,500 − 1,152 = 348 loaves, which is about 23%.
The rise pays only if fewer than about 23% of loaves are lost. Whether that is likely depends on how loyal his customers are.
Question 10 (harder). A café offers to buy 300 extra loaves a month at RM3.60 each. Zul’s spare capacity is 300 loaves. Should he accept? Give a reasoned conclusion tied to the aim of increasing profit.
Show answer
- Contribution per extra loaf = 3.60 − 1.20 = RM2.40.
- Extra contribution = 300 × 2.40 = RM720 a month. Fixed costs stay at RM2,000 because the capacity already exists, so the whole RM720 adds to profit.
Judgement. Zul should accept, provided his regular customers do not hear about the RM3.60 price and ask for the same discount. If they did, he would lose more on the 1,500 regular loaves than he gains. Since the order fills capacity that would otherwise be idle and moves him towards his profit aim, the balance favours accepting, with a check on that condition.
Question 11 (harder). Sara has found excellent revision notes titled “Business Studies 0450”. She is entered for an exam in 2027. What should she do before relying on them?
Show answer
She should treat 2027 as a transition check. Cambridge lists Business Studies 0450 for its applicable examination years and Business 0264 for first assessment in 2027. She should ask her school or exam centre which code she is entered under, read the syllabus for that code and year on the Cambridge page, and compare the notes’ contents with it. She should not assume the notes match, and registration and entry stay with her centre.
If you got these wrong
| If the error was in | Go to |
|---|---|
| Question 1, sectors | Classify an activity by economic sector |
| Question 2, opportunity cost | Explain opportunity cost in a start-up choice |
| Questions 3 and 4, costs and break-even | Classify fixed and variable costs, Calculate contribution, Read a break-even chart |
| Question 5, productivity | Operations and productivity |
| Question 6, profit and cash | Distinguish profitable trading from a cash shortage |
| Question 7, ratios | Calculate a relevant ratio from supplied figures |
| Question 8, research | Assess sample limitations |
| Question 9, price and evaluation | Compare price approaches, Test the assumptions behind a break-even conclusion |
| Question 10, judgement | Write a conclusion tied to the business objective |
| Question 11, syllabus version | Locate the learner’s actual examination year and I need to distinguish 0450 from 0264 |
If your answers are right but read as general, see my answer repeats the case without applying a concept.
What next?
Put the wrong answers in the mistake log and retest queue, then redo them from a blank page the next day. The terminology guide helps when a word caused the error.
If the same type of question keeps going wrong, online one-to-one Business tuition lets a teacher watch you work one and find the exact step. The revision guide shows how to turn these results into a plan.