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These are explanations and solutions for IB past papers, not the official version. For official papers, you can go to IB Follet or access them through your school.

02 Hours 15 Minutes

70 Marks

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IB BUSINESS MANAGEMENT HL, Paper 2, May, 2019, TZ0, Solved Past Paper

Master the 2019 IB May for Paper 2 Business Management HL with examiner tailored solutions and comments for TZ0

Question 1 [Explained]

Carolina is planning to establish a bakery named Las Migas in a small town. Given the strong competition from established bakeries, she needs a bank loan as her personal savings are insufficient. The bank manager has requested a business plan and a cash flow forecast for the first four months of operations. Carolina, with no prior experience in financial forecasting, has estimated the figures for Las Migas for the initial four months. These figures are presented in Table 1.

Estimated sales per month	Monthly rent	Interest	Opening balance	Ingredients and supplies	Electricity per month	Carolina's monthly salary
For the first two months of operations: $1500 From the third month of operations onwards: $3500	$1000	$45 to be paid every two months starting the first month of operation	$100	30% of sales	1% of sales	$390

Question 1 [a] [Explanation]

This question asks you to identify two elements, other than a cash flow forecast, that are part of a business plan.

Question 1 [b] [Explanation]

Prepare a cash flow forecast for Las Migas for the first four months of operations.

Question 1 [c] [Explanation]

Explain one problem that Las Migas may experience as a new business.

Question 2 [Explained]

Enjuice is a company that produces canned juices. The market for canned juices is highly competitive, and each can is sold at $8. Enjuice's profit margins are decreasing, prompting the marketing manager to suggest increasing advertising to boost sales. In 2018, Enjuice sold 360,000 cans. The financial data for Enjuice is summarized in the following table:

Administration expenses	Cost of goods sold	Current assets	Current liabilities	Debtors	Dividends	Interest	Marketing expenses	Sales revenue	Tax 10%
226	2440	500	400	300	120	40	14	X	Y

Question 2 [a] [Explanation]

This question asks you to identify two methods of primary market research that Enjuice could use to gather data directly from potential customers.

Question 2 [b] [Explanation]

This question requires you to use the provided financial data to calculate the missing values (X and Y) and construct a profit and loss account for Enjuice. Additionally, you need to calculate the gross profit margin.

Question 2 [b] [i] [Explanation]

To calculate the missing values X and Y, and construct a profit and loss account for Enjuice, follow these steps: