A-level Business (7132) · Paper 1: Business 1
RA10 predicted paper · June 2027 · Set B · Question paper · Time allowed: 2 hours · Maximum mark: 100
Instructions- Answer all questions in Section A and Section B.
- Answer either Question 22 or Question 23 in Section C.
- Answer either Question 24 or Question 25 in Section D.
- Section A: 15 marks · Section B: 35 marks · Section C: 25 marks · Section D: 25 marks.
- You may use a calculator.
Written by RA10 from a question-by-question analysis of the AQA 7132 papers 2020-2025 and the v2.0 specification. This is not an official AQA paper and does not contain real exam questions.
Section A
Answer all questions in this section. Only one answer per question is allowed.
[1 mark]01Which one of these changes is most likely to increase both the costs of a business and the demand for its product?- A A fall in consumer incomes
- B A rise in interest rates
- C A successful advertising campaign
- D An increase in the population of its target market
[1 mark]02In a decision tree, Option X costs £50 000. It has a 0.6 probability of earning £200 000 and a 0.4 probability of earning £80 000. The net gain of Option X is:- A £102 000
- B £152 000
- C £230 000
- D £280 000
[1 mark]03Using stakeholder mapping, a stakeholder with high power but low interest should be:- A kept informed.
- B kept satisfied.
- C managed closely.
- D monitored with minimum effort.
[1 mark]04Statement 1: 'A 95% confidence interval means the business can be certain the true value lies within the interval.'
Statement 2: 'A wider confidence interval indicates less precise market research results.'
Read Statements 1 and 2 and select the correct option.- A Statement 1 is true. Statement 2 is true.
- B Statement 1 is true. Statement 2 is false.
- C Statement 1 is false. Statement 2 is true.
- D Statement 1 is false. Statement 2 is false.
[1 mark]05A market map with axes of 'price' and 'quality' shows a large gap in the low price / high quality position. The most likely explanation is that:- A consumers do not want low prices.
- B it is difficult to achieve high quality at a low cost.
- C the market is too small to be mapped.
- D this is the position of the market leader.
[1 mark]06A business uses 40 units of inventory per day. The lead time is 3 days and it keeps a buffer of 60 units. Its re-order level should be:- A 60 units
- B 120 units
- C 180 units
- D 200 units
[1 mark]07A company has revenue of £800 000, cost of sales of £500 000 and other operating expenses of £180 000. Its operating profit margin is:- A 15.0%
- B 22.5%
- C 37.5%
- D 62.5%
[1 mark]08A business produces 9 000 units. Its break-even output is 6 000 units. Its margin of safety is:- A 3 000 units
- B 6 000 units
- C 15 000 units
- D 33.3%
[1 mark]09Statement 1: 'Centralisation is likely to improve the consistency of decisions across a business.'
Statement 2: 'Decentralisation is likely to slow down responses to local market conditions.'
Read Statements 1 and 2 and select the correct option.- A Statement 1 is true. Statement 2 is true.
- B Statement 1 is true. Statement 2 is false.
- C Statement 1 is false. Statement 2 is true.
- D Statement 1 is false. Statement 2 is false.
[1 mark]10Which one of the following is most likely to be a role of a works council?- A Negotiating national pay rates for an industry
- B Representing employees in consultation with management on workplace issues
- C Setting the legal minimum wage
- D Taking strike action on behalf of employees
[1 mark]11Carroll's Corporate Social Responsibility pyramid places responsibilities in this order, from base to top:- A economic, legal, ethical, philanthropic.
- B ethical, legal, economic, philanthropic.
- C legal, economic, philanthropic, ethical.
- D philanthropic, ethical, legal, economic.
[1 mark]12A project costs £200 000 and produces total net returns of £320 000 over 4 years. Its average rate of return is: [1 mark]13Employees who act like entrepreneurs within an existing business to develop new ideas are known as:- A benchmarkers.
- B franchisees.
- C intrapreneurs.
- D venture capitalists.
[1 mark]14Statement 1: 'Licensing allows a business to enter an overseas market with lower investment than direct investment.'
Statement 2: 'Direct investment gives a business less control over its overseas operations than licensing.'
Read Statements 1 and 2 and select the correct option.- A Statement 1 is true. Statement 2 is true.
- B Statement 1 is true. Statement 2 is false.
- C Statement 1 is false. Statement 2 is true.
- D Statement 1 is false. Statement 2 is false.
[1 mark]15According to Handy, a culture in which teams are formed around projects and expertise matters more than position is a:- A person culture.
- B power culture.
- C role culture.
- D task culture.
Section B
Answer all questions in this section.
[2 marks]16A product sells for £50 and has variable costs of £30 per unit. Fixed costs are £180,000 per year.
Calculate the break-even output. [3 marks]17The business in Question 16 produces and sells 13,500 units. It decides to cut its price by 10%. Variable and fixed costs do not change.
Calculate the new margin of safety, in units. [3 marks]18A company has an operating profit of £6.3m, total equity of £38m and non-current liabilities of £12m.
Calculate its return on capital employed (ROCE). [9 marks]19Analyse why a growing private limited company might choose to finance its expansion using retained profit rather than crowd funding. [9 marks]20Analyse how introducing kaizen might improve the competitiveness of a manufacturing business. [9 marks]21The government announces a significant increase in the National Living Wage.
Analyse the possible impact of this on a large supermarket chain. Section C
Answer either Question 22 or Question 23.
[25 marks]22'The product life cycle is of little value to a business with a large portfolio of products.'
Do you agree? Justify your view.
OR
[25 marks]23To what extent is employee engagement more important than investment in technology in improving labour productivity?
Section D
Answer either Question 24 or Question 25.
[25 marks]24Is a takeover of a local business always a better way to enter an overseas market than forming a joint venture?
Justify your view.
OR
[25 marks]25To what extent can resistance to strategic change always be overcome by education and communication?