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.
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.
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.
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
100 Marks
Calculator NOT allowed
IB BUSINESS MANAGEMENT HL, Paper 2, November, 2010, TZ0, Solved Past Paper
Master the 2010 IB November for Paper 2 Business Management HL with examiner tailored solutions and comments for TZ0
Question 1 [Explained]
Dan Bowen operates as a sole trader under the business name Dan Electro, selling digital cameras directly to consumers through an online platform. The business is located in a prime city center area, which incurs high fixed costs such as rent, marketing, administration, and interest payments. Dan initially financed the business by securing a bank loan using his residential property as collateral. The cameras are sourced from a reputable overseas supplier, requiring upfront payment, which contributes to the variable costs per camera. Despite the high costs, Dan Electro enjoys a loyal customer base that values the quality and service provided, leading to repeat purchases. However, Dan is concerned about potential cash flow issues due to rising interest rates, inflation, and increasing online competition. He is exploring strategies to mitigate these financial challenges.
Fixed costs per year | US$ |
|---|---|
Rent | 20000 |
Marketing | 4000 |
Administration | 5000 |
Interest payments | 1000 |
Variable costs per camera | US$ |
|---|---|
Camera | 135 |
Transportation | 45 |
Direct labour | 20 |
Question 1 [a] [Explanation]
This question requires you to define the term 'variable costs' and identify two advantages of operating as a sole trader. Variable costs are those costs that change in direct proportion to the level of production or output. As production increases, variable costs increase, and as production decreases, variable costs decrease. In the context of Dan Electro, these costs include expenses such as the cost of cameras, transportation, and direct labor, which vary with the number of cameras sold.
Question 1 [a] [i] [Explanation]
Define the term 'variable costs' in the context of business operations.
Question 1 [a] [ii] [Explanation]
Identify two advantages for Dan of operating as a sole trader.