Business Studies Unit 2 AQA

This booklet was made by myself combined from a range of AQA resources & books. It covers all the topics in the specification e.g. Finance, People In Business, Operations Management and Marketing. Hope it helps! Any questions just ask! ox

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Preview of Business Studies Unit 2 AQA

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Managing a
By Lubna Sana Amir

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Using budgets
Budget ­ a detailed plan of income and expenses expected
over a period of time.
A good budget has the following features:
Consistent with the aims of the business
Sets challenging but realistic targets
Is flexible to any changes
Advantages Disadvantages
Provides direction and Allocations may be incorrect
coordination as it ensures the therefore, a business will
budgets are geared towards the experience unforeseen changes
aims of the business. e.g. if the expenditure budget is
insufficient this can demotivate
staff.…read more

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Variances ­ difference between planned and actual figure
achieved/ (budget figure ­ actual figure)
Favourable variances: Profit is higher than expected
Sales is higher than expected
Expenditure is lower than expected
Adverse variances: Profit is lower than expected
Sales is lower than expected
Expenditure is higher than expected
Why businesses use variances to help make decisions?
Identifies whether the business is under or over their
budget in terms of costs and sales
Gives the business a clear idea about their progress which
enables them to…read more

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Bank overdraft: this is easy to arrange and flexible, however
interest payments tend to vary making it harder to budget.
Shortterm loan: this is at a lower interest rate than
overdrafts and the repayments are also fixed, however
collateral security is needed which can be seen as a risk.
Factoring: this can help to reduce the risk of bad debts as
debts won't be required to be chased up saving time and
money e.g. administration costs.…read more

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Reduce costs
Adv: leads to a higher profit margin on each item sold Dis:
decrease in quality can lead to a fall in demand
3) Increase quantity
Adv: this attracts sales and makes better use of capacity Dis:
can cause fixed costs to rise e.g. marketing
Other ways to increase profit:
Product development
By introducing new, fresh products draws customers in.
Successful marketing strategies e.g. sponsor from popular
brand can encourage customers to buy more of the
business's products.…read more

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Less: Variable costs
Less: Cash outflows
Less: fixed costs
= Net cash flow
= Net profit
4) Distinction between cash and profit
Cash is the physical existence of money within the
business, which can be generated by selling items of stock.
However, not all of the cash is converted into profit, as the
firm needs to meet the direct cost of selling the items as
well as indirect costs e.g. rent, rates and salaries.…read more

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1) Key elements of organisational structure
Organisational structure ­ the way a business carries out its
Levels of hierarchy ­ the number of different supervisory and
management levels between the shop floor and chief executive
in an organisation
An organisation's structure is usually shown in an
organisation chart, which illustrates the connection
between people in an organisation.
The organisational hierarchy refers to the levels of
authority and accountability in the organisation.…read more

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This is the number of subordinates a manager is responsible for.…read more


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