OCR GCSE Business: Influences on business and The interdependent nature of business (J204) – Practice Questions

These are original questions written for Marlbridge, for revision and practice on this content. They are not reproduced past-paper questions, and they do not replicate the exam’s exact structure, question count or mark tariffs – examination boards hold copyright in their own papers. Use these alongside the official past papers from your board or school.

These questions cover sections 6 (Influences on business) and 7 (The interdependent nature of business) of OCR GCSE (9-1) Business (J204), Version 2.0 (January 2026), first assessment 2019, part of Business 2: operations, finance and influences on business. All businesses are invented.

Links: study guide, revision notes, OCR GCSE Business hub, checklist, free diagnostics. The wider component also has practice questions.

Questions

1. Define the term globalisation. [2]

2. Identify two environmental considerations that a business may need to take into account. [2]

3. Tessellby Bakery has sales revenue of £90,000, cost of sales of £54,000 and other expenses of £27,000. Calculate its gross profit margin and its net profit margin. [4]

4. Newbold Garden Centre sells plants and garden furniture. Unemployment in its town rises sharply. Explain one way this could affect its sales and one way it could respond. [4]

5. Fordwick Chocolates has fixed costs of £6,000 a month. It sells bars at £4.00 each with a variable cost of £2.20. It decides to buy cocoa from growers who guarantee a fair price to their farm workers. The variable cost rises to £2.50 and the price rises to £4.40.

(a) Calculate the break-even quantity before and after the change. [4] (b) Explain one risk of raising the price. [2]

6. A multinational chain of home-improvement stores opens next to Hapton Hardware, a family-owned shop. Explain one threat this creates for Hapton Hardware and one way Hapton could compete. [4]

7. Sandwell Textiles makes 40,000 blankets a year. It compares two production sites.

Cost per blanket	Home site	Overseas site
Labour	£8.50	£3.30
Materials	£6.20	£6.40
Transport to customers	£0.90	£2.70

(a) Calculate the total cost per blanket at each site and the annual saving from choosing the overseas site. [4] (b) Analyse one way the overseas site could be a disadvantage, other than the costs shown. [3]

8. Oxbrook Print plans to spend £36,000 on a new press. Forecast profits are £2,500, £6,500, £9,500 and £7,500 over four years.

(a) Calculate the average rate of return. [3] (b) A different project costing the same has an average rate of return of 13.9%. State which project looks better on this measure and give one reason why the owner should not decide on this figure alone. [2]

9. Moorhaven Toys runs a social media campaign that doubles its orders for two months. Explain how this could affect its operations, its finance and its human resources. [6]

10. Moorhaven Toys has an opening cash balance of £4,000 in April. Forecast cash inflows and outflows are: April £18,000 and £21,000; May £15,000 and £19,500; June £24,000 and £17,000.

(a) Calculate the closing cash balance for each month. [3] (b) Comment on what the forecast shows and suggest one action. [2]

11. Dunlin Soaps sells 30,000 soaps a year. Last year its net profit was £21,000. The owner is considering recyclable packaging that adds 18p to the cost of each soap. Consumer incomes in the area are falling. Evaluate whether Dunlin Soaps should switch to the new packaging. [9]

12. Ravenholt Fitness has two expansion options.

	Option A: second gym	Option B: online classes
Investment	£80,000	£50,000
Forecast profit, years 1 to 4	£7,000, £16,000, £22,000, £25,000	£10,000, £12,000, £12,000, £12,000

Recommend which option Ravenholt Fitness should choose. Justify your answer using financial information and the links between business functions. [9]

Answers

1. The increasing connection between economies or countries [1], so that goods, services, money and ideas move more freely across borders [1]. [2] Examiner insight: A definition earns more when it says what is connected and what moves; the single word “global” adds little.

2. Any two from sustainability, waste disposal, pollution and climate change: first [1]; second [1]. [2] Examiner insight: “Identify” asks for a name only, so explanation uses time but gains nothing extra.

3. Gross profit = 90,000 - 54,000 = £36,000 [1]. Gross profit margin = 36,000 / 90,000 x 100 = 40% [1]. Net profit = 36,000 - 27,000 = £9,000 [1]. Net profit margin = 9,000 / 90,000 x 100 = 10% [1]. [4] Examiner insight: Showing the formula and the intermediate profit figure gives a marker something to credit even if the final division goes wrong.

4. Effect: more households have lost wages, so they have less to spend [1], and demand for non-essential items such as garden furniture is likely to fall [1]. Response: sell a cheaper range or run promotions on lower-priced plants [1] because customers are trading down, which helps protect sales [1]. [4] Examiner insight: Naming the product type that is hit hardest shows application to the case and is stronger than saying “sales fall”.

5. (a) Before: contribution = 4.00 - 2.20 = £1.80 [1]; break-even = 6,000 / 1.80 = 3,333.3, so 3,334 bars [1]. After: contribution = 4.40 - 2.50 = £1.90 [1]; break-even = 6,000 / 1.90 = 3,157.9, so 3,158 bars [1]. (b) Some customers may refuse to pay £4.40 and buy a cheaper brand [1], so sales could fall below the new break-even and the business would make a loss instead of the profit it expects [1]. [6] Examiner insight: Break-even is a whole number of units, so rounding up to the next bar is the sensible reading; a decimal answer with no comment can look careless.

6. Threat: the multinational may buy in large quantities and sell at lower prices than Hapton can match [1], so customers may switch and Hapton’s sales fall [1]. Way to compete: offer local advice, personal service or delivery that the large chain may not provide [1], which can build loyal customers who value this over price [1]. [4] Examiner insight: The strongest answers tie each point to a feature of a small family shop rather than giving a general list about big firms.

7. (a) Home = 8.50 + 6.20 + 0.90 = £15.60 [1]. Overseas = 3.30 + 6.40 + 2.70 = £12.40 [1]. Saving per blanket = £3.20 [1]. Annual saving = 3.20 x 40,000 = £128,000 [1]. (b) The overseas site is further from customers [1], so deliveries take longer and the business may have to hold more stock [1], which ties up cash and makes it slower to meet urgent orders [1]. [7] Examiner insight: “Analyse” rewards a chain of reasons; stopping at “it is far away” earns only the first step.

8. (a) Total profit = 2,500 + 6,500 + 9,500 + 7,500 = £26,000 [1]. Average annual profit = 26,000 / 4 = £6,500 [1]. ARR = 6,500 / 36,000 x 100 = 18.1% [1]. (b) The press project looks better because 18.1% is higher than 13.9% [1]. The profits are forecasts and may not happen, and the figure ignores risk and the timing of cash [1]. [5] Examiner insight: A limitation is credited when it is specific to the measure, such as reliance on forecasts, not a vague “it might be wrong”.

9. Operations: the business must make or buy about twice as much stock [1], so it may need extra capacity, overtime or a larger order to suppliers to avoid late deliveries [1]. Finance: it must pay for stock and wages before customers pay [1], so cash could run short even though sales are high [1]. Human resources: extra staff or longer hours are needed [1], which means recruitment or training and a risk of tired, less motivated workers [1]. [6] Examiner insight: Each function needs its own developed point; three one-line mentions usually cannot show the links the question asks for.

10. (a) April: 4,000 + 18,000 - 21,000 = £1,000 [1]. May: 1,000 + 15,000 - 19,500 = -£3,500 [1]. June: -3,500 + 24,000 - 17,000 = £3,500 [1]. (b) The business is short of cash at the end of May [1]. It could arrange an overdraft for May or ask suppliers for longer to pay [1]. [5] Examiner insight: A negative balance should be written with its minus sign; a comment that uses the figure from the forecast shows you have read it.

11. Extra cost = 30,000 x 0.18 = £5,400 a year [1]. This is about 26% of last year’s net profit of £21,000 [1]. For: customers who care about the environment may prefer the packaging [1], and it may protect the brand’s reputation in the long run [1]. Against: with falling incomes, customers are price sensitive, so Dunlin may not be able to raise the price [1], and the cost would reduce profit sharply [1]. Weighing the two: the benefit is uncertain while the cost is certain [1]. Judgement: it should not switch fully now, but could trial the packaging on a premium range or wait until incomes recover [1], because a small business with limited profit must protect cash first [1]. [9] Examiner insight: An evaluate answer gains from a judgement that refers to the figures in the stem and gives a reason, not from a conclusion that repeats both sides.

12. Option A: total profit = £70,000, average £17,500, ARR = 17,500 / 80,000 x 100 = 21.9% [1]. Option B: total profit = £46,000, average £11,500, ARR = 11,500 / 50,000 x 100 = 23.0% [1]. A has the larger reward, with profits reaching £25,000 a year [1], but needs £80,000 up front and earns only £7,000 in year 1 [1]. B costs less and starts earning at once, so the risk is lower [1], but its profit is flat at £12,000 so it offers little growth [1]. Both figures are forecasts and say nothing about why profits might differ [1]. A would also need premises, staff and a marketing push, so operations, human resources and marketing are all involved [1]. Recommendation: B, because its higher ARR on a smaller outlay gives a better return for lower risk, though A could be revisited once cash allows [1]. [9] Examiner insight: A recommendation is stronger when it names the deciding factor and what would change the choice, rather than listing figures.

Where marks are usually lost

• Giving a definition or identification in a long paragraph when a short answer was asked for.
• Naming an influence without saying what it does to the business.
• Calculating a margin but not saying whether it is gross or net.
• Rounding break-even down when only whole units can be sold.
• Treating all businesses as equally affected by falling incomes.
• Analysing a location only by cost and ignoring distance, delivery and stock.
• Quoting average rate of return without noting that profits are forecasts.
• Writing about one function when the question names several.
• Ending an evaluate or recommend answer with no judgement, or a judgement with no reason.

Frequently asked questions

What do sections 6 and 7 of OCR GCSE Business J204 cover? Section 6 covers influences on business: ethical and environmental considerations, the economic climate and globalisation. Section 7 covers the interdependent nature of business, including how the functions link, risk and reward, and the use of financial information.

What should you say when you calculate a margin? State clearly whether the margin is gross or net, and give it as a percentage of revenue. A figure without its label can lose marks even when the arithmetic is right.

How do you answer a “recommend” question using financial information? Use the figures given, such as forecast profit, ARR or break-even, to compare the options, then add a non-financial factor from the case. Finish by choosing one option and saying why it is better than the alternative.

Next steps

• Re-read the study guide and the revision notes.
• Return to the OCR GCSE Business hub and tick off topics on the checklist.
• Take one of the free 10-minute diagnostics.
• Book a free trial class.

Official syllabus

OCR GCSE (9-1) Business (J204), Version 2.0 (January 2026), first assessment 2019, published by OCR. Sections 6 and 7 of the specification.