Commerce 4CM1 | Paper 1 Mock 01 | Written Paper 1
Question 1 Report
Fig. 1 shows self-service checkouts in a supermarket. One employee is nearby to help customers scan goods, weigh loose produce and make card payments. The supermarket is considering adding four more machines during busy evening shopping periods.
(a) Which technology is shown in Fig. 1? [1]
(b) State two benefits of self-service checkouts for customers. [2]
(c) Explain two reasons why the supermarket may use more self-service checkouts. [4]
(a) The technology is a self-service checkout, also called an automated checkout [1].
(b) Self-service checkouts may provide shorter queues or quicker payment [1]. They are also convenient for a small number of goods [1]. Customers may pack at their own pace and can use them when fewer cashiers are working.
(c)
- Fewer checkout staff may be needed [1]. This can reduce wage costs or allow staff to work elsewhere in the supermarket [1].
- More customers can pay at the same time [1]. This reduces queues and improves customer service, especially during busy evenings [1].
Answer Details
(a) The technology is a self-service checkout, also called an automated checkout [1].
(b) Self-service checkouts may provide shorter queues or quicker payment [1]. They are also convenient for a small number of goods [1]. Customers may pack at their own pace and can use them when fewer cashiers are working.
(c)
- Fewer checkout staff may be needed [1]. This can reduce wage costs or allow staff to work elsewhere in the supermarket [1].
- More customers can pay at the same time [1]. This reduces queues and improves customer service, especially during busy evenings [1].
Question 2 Report
A bicycle retailer lets customers test electric bicycles outside its shop. A customer falls during a test ride and says that the business should pay for medical treatment. The retailer is reviewing its risks before renewing insurance cover.
(a) Identify the person who could make a claim against the retailer in this situation. [1]
(b) State one type of cost the retailer may face if it has no suitable insurance. [1]
(c) Give two reasons why the retailer should keep records of each test ride. [2]
(a) The person who could claim against the retailer is the customer who was riding the bicycle. [1]
(b) Without suitable insurance, the retailer may have to pay compensation, legal costs or medical costs itself. [1]
(c) Test-ride records provide evidence of what happened and confirm the customer's identity. They can also record the bicycle's condition or that a safety briefing was given. This evidence is useful if liability is disputed. [2]
Answer Details
(a) The person who could claim against the retailer is the customer who was riding the bicycle. [1]
(b) Without suitable insurance, the retailer may have to pay compensation, legal costs or medical costs itself. [1]
(c) Test-ride records provide evidence of what happened and confirm the customer's identity. They can also record the bicycle's condition or that a safety briefing was given. This evidence is useful if liability is disputed. [2]
Question 3 Report
Fig. 1 shows a retailer offering a washing machine to customers. The customer pays a deposit, takes the goods home, and then makes fixed monthly payments. The retailer keeps legal ownership until the final payment has been made.
(a) Identify the type of consumer credit shown in Fig. 1. [1]
(b) State one reason why a consumer may use this type of credit to purchase the washing machine. [1]
(c) Give two features of this credit arrangement that the retailer should explain to the customer before the agreement is signed. [2]
(a) This consumer credit arrangement is hire purchase [1].
(b) The consumer can obtain and use the washing machine immediately without paying the full price at once [1].
(c) Before signing, the retailer should explain the deposit required [1] and the number or amount of monthly instalments [1]. The total amount repayable or interest, the fact that ownership passes only after the final payment, and consequences of missed payments are also important valid features.
Answer Details
(a) This consumer credit arrangement is hire purchase [1].
(b) The consumer can obtain and use the washing machine immediately without paying the full price at once [1].
(c) Before signing, the retailer should explain the deposit required [1] and the number or amount of monthly instalments [1]. The total amount repayable or interest, the fact that ownership passes only after the final payment, and consequences of missed payments are also important valid features.
Question 4 Report
The following table shows trading data for FreshRoute Ltd, a private limited company that runs hypermarkets selling food and household goods. The directors want to decide whether to open a further hypermarket next year.
| Year | Number of hypermarkets | Sales revenue (£000) | Employees |
|---|---|---|---|
| 2024 | 6 | 18 600 | 420 |
| 2025 | 8 | 25 200 | 560 |
(a) Calculate the increase in sales revenue from 2024 to 2025. Give your answer in £000. [2]
(b) Calculate the average number of employees per hypermarket in 2025. [2]
(c) Identify the sector in which FreshRoute Ltd operates. [1]
(d) State two features of a private limited company. [2]
(e) Explain two possible benefits to FreshRoute Ltd of operating hypermarkets rather than small independent shops. [4]
(f) Give one reason why the directors should use more than sales revenue when deciding whether to open another store. [1]
(a) Sales revenue increased by:
\[\pounds25\,200\text{ thousand}-\pounds18\,600\text{ thousand}=\pounds6\,600\text{ thousand}\]
The increase is £6 600 thousand, or £6 600 000 [2].
(b)
\[560\div8=70\]
The average is 70 employees per hypermarket [2].
(c) FreshRoute Ltd is in the private sector, tertiary sector, or retail sector [1]. It is privately owned and sells goods to consumers.
(d) Two features of a private limited company are that it is owned by shareholders [1] and its shares cannot be sold to the general public [1]. Limited liability, separate legal identity and using “Ltd” are also valid.
(e) Hypermarkets can buy a large quantity of goods in bulk, reducing unit costs [1]. This allows lower prices for customers or higher profit margins [1]. They can also offer a wider product range, attracting more customers [1] and increasing sales [1]. Economies of scale in advertising or distribution, reducing cost per item, would be another developed benefit.
(f) Sales revenue alone does not show whether another store will be successful because profit may be low if costs are high [1]. Local demand, available finance and competition should also be considered.
Answer Details
(a) Sales revenue increased by:
\[\pounds25\,200\text{ thousand}-\pounds18\,600\text{ thousand}=\pounds6\,600\text{ thousand}\]
The increase is £6 600 thousand, or £6 600 000 [2].
(b)
\[560\div8=70\]
The average is 70 employees per hypermarket [2].
(c) FreshRoute Ltd is in the private sector, tertiary sector, or retail sector [1]. It is privately owned and sells goods to consumers.
(d) Two features of a private limited company are that it is owned by shareholders [1] and its shares cannot be sold to the general public [1]. Limited liability, separate legal identity and using “Ltd” are also valid.
(e) Hypermarkets can buy a large quantity of goods in bulk, reducing unit costs [1]. This allows lower prices for customers or higher profit margins [1]. They can also offer a wider product range, attracting more customers [1] and increasing sales [1]. Economies of scale in advertising or distribution, reducing cost per item, would be another developed benefit.
(f) Sales revenue alone does not show whether another store will be successful because profit may be low if costs are high [1]. Local demand, available finance and competition should also be considered.
Question 5 Report
A craft seller has booked a stall at a three-day outdoor festival. Heavy rain may cause the organiser to cancel the event. The seller has already paid $900 for the stall and has bought products specifically for festival customers. She is considering cancellation insurance.
(a) State two costs that the seller could lose if the festival is cancelled. [2]
(b) Explain why cancellation insurance may be more useful than simply keeping the $900 in the business bank account. [3]
(a) The seller could lose the $900 stall fee and the cost of products bought specifically for festival customers, including products left unsold. [2]
(b) Cancellation insurance can provide a payment larger than the $900 held in the bank, depending on the cover and insured loss. It protects against the specific unexpected risk of cancellation and may give the seller funds to continue trading or pay suppliers after the event is cancelled. Keeping cash only protects up to the amount saved. [3]
Answer Details
(a) The seller could lose the $900 stall fee and the cost of products bought specifically for festival customers, including products left unsold. [2]
(b) Cancellation insurance can provide a payment larger than the $900 held in the bank, depending on the cover and insured loss. It protects against the specific unexpected risk of cancellation and may give the seller funds to continue trading or pay suppliers after the event is cancelled. Keeping cash only protects up to the amount saved. [3]
Question 6 Report
A frozen-food company is planning to export ice cream to retailers on an island 1,200 miles from its home country. It can send a full refrigerated container by sea or use air freight. The business expects regular orders but customers want low prices.
(a) State the type of goods being transported. [1]
(b) Calculate the number of miles travelled for a return sea journey. [2]
(c) Explain why sea freight is likely to be the better option for the company. [6]
(a) Ice cream is a perishable good, specifically frozen food. [1]
(b)
\[1200\text{ miles} \times 2=2400\text{ miles}\]
The return sea journey is 2400 miles. [2]
(c) Sea freight is likely to be preferable because:
- A full container sent by sea is cheaper than air freight, helping the business keep retail prices low. [2]
- Ships carry large volumes, so regular orders can be sent together in bulk. [2]
- A refrigerated container keeps the ice cream frozen, reducing spoilage and waste during the long journey. [2]
Air freight may be faster, but its higher cost could reduce profit or force the business to charge customers more. [6]
Answer Details
(a) Ice cream is a perishable good, specifically frozen food. [1]
(b)
\[1200\text{ miles} \times 2=2400\text{ miles}\]
The return sea journey is 2400 miles. [2]
(c) Sea freight is likely to be preferable because:
- A full container sent by sea is cheaper than air freight, helping the business keep retail prices low. [2]
- Ships carry large volumes, so regular orders can be sent together in bulk. [2]
- A refrigerated container keeps the ice cream frozen, reducing spoilage and waste during the long journey. [2]
Air freight may be faster, but its higher cost could reduce profit or force the business to charge customers more. [6]
Question 7 Report
Rina owns a bakery that plans to sell packed lunches to office workers. Before ordering goods, she carried out market research. Of 280 people who completed her questionnaire, 65% said they would buy a lunch costing less than £6. Rina also watched customers at two nearby retailers during lunchtime.
(a) State two methods of market research Rina could use to collect information from office workers. [2]
(b) Identify the type of research obtained by watching customers. [1]
(c) Calculate the number of questionnaire respondents who said they would buy a lunch costing less than £6. Show your working. [2]
(d) Give one reason why this research may help Rina when setting a selling price. [1]
(a) Two market-research methods are a questionnaire or survey [1] and an interview [1]. Observation, focus groups and online polls are also valid.
(b) Watching customers is observation, a form of primary research [1] because Rina collects the information herself.
(c)
\[280\times\frac{65}{100}=182\]
182 respondents said they would buy a lunch under \(£6\) [2].
(d) The research indicates a price customers are willing to pay [1], helping Rina avoid setting the price too high.
Answer Details
(a) Two market-research methods are a questionnaire or survey [1] and an interview [1]. Observation, focus groups and online polls are also valid.
(b) Watching customers is observation, a form of primary research [1] because Rina collects the information herself.
(c)
\[280\times\frac{65}{100}=182\]
182 respondents said they would buy a lunch under \(£6\) [2].
(d) The research indicates a price customers are willing to pay [1], helping Rina avoid setting the price too high.
Question 8 Report
Table 1 shows three insurance options offered to a small electronics repair business. Each option covers tools worth up to $10,000. The business owner wants an option with a low premium but also wants to understand the excess before selecting an answer.
| Option | Annual premium ($) | Excess per claim ($) |
|---|---|---|
| A | 360 | 100 |
| B | 280 | 250 |
| C | 450 | 0 |
(a) Calculate the difference between the annual premiums for options A and B. [2]
(b) Identify the option with no excess. [2]
(c) Explain two reasons why option B may not be the best choice for this business. [4]
(a) Find the difference by subtracting the lower annual premium from the higher one:
\[\$360-\$280=\$80\]
The difference is \(\$80\) [2].
(b) The policy with a \(\$0\) excess is the one costing \(\$450\) per year [2]. An excess is the amount the business must pay towards each claim.
(c) The \(\$280\)-premium policy may not be best for two explained reasons:
- It has the highest excess, \(\$250\) [1]. The business must fund this amount for every claim, which could create cash-flow difficulty [1].
- For small or repeated losses, claiming may not be worthwhile [1], because the \(\$250\) excess reduces, or may remove, the insurer's payment [1].
Also, a low premium alone does not prove good protection: the business should check risks covered, exclusions and limits.
Answer Details
(a) Find the difference by subtracting the lower annual premium from the higher one:
\[\$360-\$280=\$80\]
The difference is \(\$80\) [2].
(b) The policy with a \(\$0\) excess is the one costing \(\$450\) per year [2]. An excess is the amount the business must pay towards each claim.
(c) The \(\$280\)-premium policy may not be best for two explained reasons:
- It has the highest excess, \(\$250\) [1]. The business must fund this amount for every claim, which could create cash-flow difficulty [1].
- For small or repeated losses, claiming may not be worthwhile [1], because the \(\$250\) excess reduces, or may remove, the insurer's payment [1].
Also, a low premium alone does not prove good protection: the business should check risks covered, exclusions and limits.
Question 9 Report
Fig. 1 shows a cash machine outside a bank branch. Noor uses the machine after the bank has closed to obtain cash for her market stall.
(a) Name the part labelled X. [1]
(b) Name the part labelled Y. [1]
(a) The part labelled X is the card slot, also called the card reader. It is where the customer inserts or uses their bank card. [1]
(b) The part labelled Y is the cash dispenser, also called the cash outlet. It is where the machine releases the cash. [1]
Answer Details
(a) The part labelled X is the card slot, also called the card reader. It is where the customer inserts or uses their bank card. [1]
(b) The part labelled Y is the cash dispenser, also called the cash outlet. It is where the machine releases the cash. [1]
Question 10 Report
Read the information below about trade in a small island country.
The state wants to support local businesses that assemble rechargeable lanterns. It has issued licences allowing companies to bring in no more than 12 500 finished lanterns from overseas during the calendar year. By the end of October, importers had used licences for 10 800 lanterns. BrightHome, a retailer, plans to buy 2 400 more finished lanterns on credit from a foreign supplier.
(a) Calculate how many finished lanterns may still be imported before the limit is reached. Show your working. [2]
(b) Identify the trade restriction used by the state. [1]
(c) Explain two reasons why the state may use this restriction to help local lantern businesses. [4]
(a) Calculate the unused part of the annual limit:
\[12\,500-10\,800=1\,700\]
1,700 finished lanterns may still be imported [2].
(b) The restriction is an import quota, or import limit [1]. It sets a maximum quantity that may be imported.
(c) A quota limits competition from cheaper foreign finished lanterns. Local assemblers may therefore sell more lanterns [2]. It can also give local businesses time to grow and become more efficient [2]. Protecting local jobs, and reducing money paid to foreign suppliers to improve the balance of trade, are further valid explained reasons.
Answer Details
(a) Calculate the unused part of the annual limit:
\[12\,500-10\,800=1\,700\]
1,700 finished lanterns may still be imported [2].
(b) The restriction is an import quota, or import limit [1]. It sets a maximum quantity that may be imported.
(c) A quota limits competition from cheaper foreign finished lanterns. Local assemblers may therefore sell more lanterns [2]. It can also give local businesses time to grow and become more efficient [2]. Protecting local jobs, and reducing money paid to foreign suppliers to improve the balance of trade, are further valid explained reasons.
Question 11 Report
Fig. 1 shows a point-of-sale sign used by an electronics retailer during a weekend trade promotion. A customer buys one wireless speaker and pays immediately.
(a) Identify the percentage reduction shown on the sign. [1]
(b) Calculate the price after the 20% reduction. Show your working. [2]
(c) Calculate the final amount paid by the customer. Show your working. [3]
(a) The sign shows a 20% reduction [1].
(b) Calculate the 20% discount:
\[20\%\text{ of }\$125=\frac{20}{100}\times\$125=\$25\]
Subtract it from the usual price:
\[\$125-\$25=\$100\]
The sale price is $100 [2].
(c) The price after the sale reduction is $100 [1]. Paying immediately gives a further $5 cash discount:
\[\$100-\$5=\$95\]
The final amount paid is $95 [3]. The $5 is deducted after, not instead of, the 20% reduction.
Answer Details
(a) The sign shows a 20% reduction [1].
(b) Calculate the 20% discount:
\[20\%\text{ of }\$125=\frac{20}{100}\times\$125=\$25\]
Subtract it from the usual price:
\[\$125-\$25=\$100\]
The sale price is $100 [2].
(c) The price after the sale reduction is $100 [1]. Paying immediately gives a further $5 cash discount:
\[\$100-\$5=\$95\]
The final amount paid is $95 [3]. The $5 is deducted after, not instead of, the 20% reduction.
Question 12 Report
Fig. 1 shows a small grocery shop after a water pipe burst overnight. The owner has insurance cover for stock but is unsure whether the damaged ceiling is included. The insurance company asks the owner to identify each type of loss before making a claim.
(a) State the item in Fig. 1 that is the shop's stock. [1]
(b) Identify one reason why the business should check its insurance policy before claiming for the ceiling. [1]
(a) The shop's stock is the wet stock, meaning goods held for sale. [1]
(b) The owner must check whether the policy includes building damage, such as damage to the ceiling, rather than only stock. This avoids making a claim for something excluded from cover. [1]
Answer Details
(a) The shop's stock is the wet stock, meaning goods held for sale. [1]
(b) The owner must check whether the policy includes building damage, such as damage to the ceiling, rather than only stock. This avoids making a claim for something excluded from cover. [1]
Question 13 Report
Fig. 1 shows part of ChillRoute Ltd's warehouse, used to distribute chilled ready meals to retailers in the UK. Goods enter through the receiving bay before being placed into the correct storage area. The company checks that cold storage is kept at a safe temperature.
(a) Identify the area in Fig. 1 where deliveries from suppliers are first checked. [1]
(b) State the temperature shown for the cold storage area. [1]
(c) Give two reasons why the company keeps ready meals in cold storage rather than the ambient store. [2]
(a) Deliveries are first checked in the receiving bay. This is the entry point for goods arriving from suppliers. [1]
(b) The cold store is shown at 2°C. [1]
(c) Ready meals are perishable, so cold storage is needed rather than an ambient store. Low temperature slows bacterial growth, which reduces spoilage. It therefore keeps the meals safe and maintains their freshness and quality for customers. Any two valid reasons gain credit. [2]
Exam reminder: For chilled food, link the low temperature to slower bacterial growth, then to safety, reduced waste or product quality.
Answer Details
(a) Deliveries are first checked in the receiving bay. This is the entry point for goods arriving from suppliers. [1]
(b) The cold store is shown at 2°C. [1]
(c) Ready meals are perishable, so cold storage is needed rather than an ambient store. Low temperature slows bacterial growth, which reduces spoilage. It therefore keeps the meals safe and maintains their freshness and quality for customers. Any two valid reasons gain credit. [2]
Exam reminder: For chilled food, link the low temperature to slower bacterial growth, then to safety, reduced waste or product quality.
Question 14 Report
Fig. 1 shows a window advertisement designed by a new independent retailer, North Street Books. The business wants more customers to visit its shop during the school holiday.
(a) Identify the method of promotion used in Fig. 1. [1]
(b) State one appeal used in this advertisement. [1]
(c) Give two reasons why this method may increase sales for the retailer. [2]
(a) The promotion is a sales promotion, specifically a buy-two-get-one-free offer. [1]
(b) The advertisement appeals through saving money because the customer receives a free book. The free item and the limited-time message also create appeal and urgency. [1]
(c) The offer can attract customers into the shop and encourage them to buy more books than planned. Its prominent window display makes the offer noticeable, and “This week only” can encourage customers to visit before it ends. Any two. [2]
Answer Details
(a) The promotion is a sales promotion, specifically a buy-two-get-one-free offer. [1]
(b) The advertisement appeals through saving money because the customer receives a free book. The free item and the limited-time message also create appeal and urgency. [1]
(c) The offer can attract customers into the shop and encourage them to buy more books than planned. Its prominent window display makes the offer noticeable, and “This week only” can encourage customers to visit before it ends. Any two. [2]
