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Semester 1 Examinations 2008/ 2009
Exam Code(s) 1CD1, 1MT1, 1MV1, 1AM, 1AS, 1CB, 3BY1, 1MSR Exam(s) M.A. Community Development M.Sc. Biotechnology M. Sc. Biomedical Science H. Dip. Microbiology H. Dip. Analytical Chemistry/Biochemistry M.Sc. Analytical Chemistry/Biochemistry B.Sc. Biotechnology M.Sc Regenerative Medicine
Module Code(s) MG529; BC851; BG Module(s) Introduction to Business
Paper No. - Repeat Paper -
External Examiner(s) Professor C. Easingwood Professor C. Eden Professor B. O’ Dwyer
Internal Examiner(s) Ms. O.Higgins Professor H.Scullion Dr. J. Cunningham Ms. D.Ruddy
Instructions: USE A^ SEPARATE^ ANSWER BOOK FOR EACH SECTION.
ANSWER: TWO (2) questions from SECTION A TWO (2) questions from SECTION B TWO (2) questions from SECTION C
Duration 3.5 Hours
No. of Pages 6 Department(s) Accountancy & Finance; Marketing; Management Course Co-ordinator(s) Ms. Deirdre Ruddy
Requirements : MCQ - Handout - Statistical Tables - Graph Paper - Log Graph Paper - Other Material -
SECTION A
MARKETING
Candidates are required to answer TWO (2) questions from this section.
PLEASE ANSWER IN A SEPARATE ANSWER BOOK.
Q1. Define marketing in your own words. Explain the features of a marketing oriented organisation and why it is important for a company to be customer-focused.
Q2. Why is it important to conduct marketing research prior to the launch of a new product? Explain the difference between primary and secondary research and the reasons you would need to conduct both.
Q3. What factors should an organisation take into account when deciding on a pricing strategy for a product or service? Under what conditions might firms pursue a high price and under what conditions might firms pursue a low price?
Q4. Define and discuss, using examples, the concepts of market segmentation and targeting.
(25 marks each question) (TOTAL: 50 MARKS)
SECTION C
ACCOUNTING
Candidates are required to answer TWO (2) questions from this section.
PLEASE ANSWER IN A SEPARATE ANSWER BOOK.
ACCOUNTING - PART A – ANSWER EITHER QUESTION 1 OR QUESTION 2
QUESTION 1
CompuPac Limited is considering introducing a compact computerized personal organizer to their range of products. The managing director has received the following budget for the first year of operations.
The budget is based on planned sales of 8,000 units
Sales (8,000 personal organizers) 520,
Direct Material Cost 192,
Direct Labour Cost 144,
Variable Overhead 48,
Fixed Overheads 85,
Budgeted Profit 51,
From the information given you are required to answer the following:
(a) Calculate the contribution per unit for the production of the personal organizer (5 marks) (b) Calculate the Break-Even point in sales units and sales revenue (6 marks) (c) Calculate the volume of sales required to achieve a profit of €68, (4 marks) (d) Explain what is meant by ‘Margin of Safety’ and calculate the margin of safety in percentage terms for CompuPac Limited (6 marks)
(e) The business is considering increasing the sales price by 10% but has calculated that sales volume may then decrease by 5%. Calculate the new break-even point and new profit at this level and advise the business as to whether it should implement this new strategy. (10 marks)
(f) Outline two of the limitations of Break-Even analysis. (4 marks) (TOTAL 35 MARKS)
QUESTION 2
Molton Ltd is due to be set up in September 2008. A loan of €30,000 will be used to finance the business, receivable in September, requiring payments of €1,000 per month over 3 years from October’08. The company plans to purchase equipment costing €30,000 in September. The equipment will be paid for 3 months later. A grant will be received for the purchase of the equipment, €10,000 being received in December ’08, and €20,000 in April’09.
The trading plans for the first eight months are as follows:
€ € Sales: September Nil October 32, November 38,000 December 44, January 55,000 February 40, March 44,
Credit will be given to customers as follows:
40% payment to be received in the month of sale 50% receivable one month later 5% receivable 2 month after sale
The balance of 5% is to be treated as bad debts i.e debtors who will never pay.
Purchases are to be made one month in advance of sales and the purchase cost will be 75% of the sales value. Two months credit will be received from suppliers, i.e purchases will be paid for 2 months after purchase.
The equipment purchased will be depreciated on a straight line basis at a rate of 10% per annum. General expenses are expected to be €5,000 per month payable as incurred Wages are €8,000 per month. Deductions for PAYE and PRSI are estimated to be €1,800 per month payable in the month following deduction..
REQUIRED:
(a) Prepare a cash budget for the 4 months from September to February. (25 marks)
(b) Outline 3 reasons why a business should prepare a cash budget. (7 marks)
(c) Explain the terms PAYE and PRSI (3 marks) (TOTAL: 35 MARKS)
