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Solving ICSE Class 10 Commercial Applications Previous Year Question Papers ICSE Class 10 Commercial Applications Question Paper 2017 is the best way to boost your preparation for the board exams.

ICSE Class 10 Commercial Applications Question Paper 2017 Solved

Section – A (40 Marks)
Attempt all questions from this Section

Question 1.
State one difference between each of the following:
(a) Consumer Goods and Producers ‘Goods’ [2]
(b) Orientation Training and Refresher Training [2]
(c) Transfer and Promotion [2]
(d) Historical Costs and Predetermined Costs [2]
(e) Advertising and Publicity [2]
Answer:

(a)	Consumer Goods	Producers’ Goods
	Consumer goods are those products which are directly used by the ultimate consumers or households. For Example : Milk, Butter, Television etc.	Producers’ goods are those products which are purchased for use in manufacturing other goods. For Example : Cotton is used for making clothes.
(b)	Orientation Training	Refresher Training
	Orientation training refers to the training given to new employees to familiarise them with the policies, rules and regulations of the organisation.	Refresher training is designed to teach employees latest de­velopments in work methods and procedures.
(c)	Transfer	Promotion
	A transfer means shifting of an employee from one place to another without any change in rank, re­sponsibility and remuneration. Transfer is a Horizontal movement of an employee.	A promotion means shifting of an employee from a lower post to a higher post. Promotion involves a vertical movement or advancement of an employee.
(d)	Historical Costs	Predetermined Costs
	The costs which are ascertained after being incurred are called historical costs. It is also known as original costs.	Predetermined costs are those costs which are estimated or budgeted. They are computed in advance of production keeping in view past costs or future trends.
(e)	Advertising	Publicity
	Advertising communicates only commercial infor­mation to the public. The advertiser has to pay to media owners.	Publicity may or may not be related with the communi­cation of commercial information. The individual or firm involved does not have to pay.

Question 2.
(a) Mention two features of Services. [2]
(b) What are indirect expenses ? Give an example. [2]
(c) Mention the advantages of Cost plus pricing. [2]
(d) Explain any two impacts of Acid Rain. [2]
(e) Mention any two merits of internal sources of recruitment. [2]
Answer:
(a) Features of Services are as follows :

1. Services are intangible as they cannot be seen or touched. They have no physical shape.
2. Services are produced and consumed at the same time. The service cannot be separated from the service provider.

(b) Indirect expenses are those expenses which cannot be wholly and directly identified with specific product or job. For example : Rent, lighting, insurance charges, depreciation etc.
Indirect Expenses falls under three heads :

(c) Advantages of Cost plus pricing are :

1. Cost plus pricing ensures full coverage of costs and helps in achieving a reasonable return on capital employed.
2. This is most widely used technique of pricing and safe approach.
3. It discourage cut-throat competition in the market.

(d) Impacts of Acid Rain are as follows :

1. Impact on Buildings and Monuments : Acid rain is corrosive. Acid rain contributes to the corrosion and deterioration of buildings and monuments, which decreases their value and increases cost of correcting . and repairing damage.
2. Impact on Human Health : Acid causes irritation in eyes and skin. It reduces visibility and causes disorders in the respiratory system. Drinking water containing acid rain leads to food poisoning.

(e) Merits ofintemal sources of recruitment are :

1. Economical: Internal recruitment is economical. The cost incurred in advertising agencies and screening candidates is avoided. No outside references are required.
2. Upgrading of Several Employees : The existing employees of the organisation get an opportunity for promotion. When a certain person is promoted, several other persons below his rank are automatically promoted.

Question 3.
(a) Distinguish between Shut Down Cost and Sunk Cost.   [2]
(b) Why is Dialogue an important element in Public relations ?   [2]
(c) State any two features of a Balance Sheet of a company.   [2]
(d) Explain briefly Employee Relations as a scope of Public Relations.   [2]
(e) Explain current assets with an example.   [2]
Answer:
(a) Distinguish between Shut Down Cost and Sunk Cost as follows :

1. Shut down costs are the expenses that have to be incurred during the shut down or stoppage of business operations. On the other hand, sunk costs are the expenses which have been committed and cannot be changed.
2. Rent and insurance of factory during its closure is a shut down cost. Investment already made in factory building is a sunk cost.

(b) Dialogue is an important element in Public relations because:

1. If a person goes on talking without allowing others to participate in the discussion or talk, then it becomes a monologue.
2. Dialogue reveals the true personality of a person.
3. It helps to reduce prejudice and builds up mutual confidence.
4. Effective dialogue requires impartial listening and understanding.

(c) Features of a Balance Sheet of a company are :

1. Balance Sheet is always prepared on a particular date.
2. It is prepared after the preparation of Income and Expenditure Account and Profit and Loss Account.
3. It shows financial position on a particular date.
4. It is not an account but a statement.

(d) Employee Relations :
The expansion in the industrial work force has created serious problems in communication and relations with employees. Poor communication creates misunderstanding. The foundation to good employee relations are sound personnel policies and their impartial implementation. Employees judge a company by its personnel policies and the practices of management in carrying out these policies.

(e) Current Assets :
Current assets are those assets which are converted into cash within a short period, generally one year. No depreciation is charged on current assets. Examples of current assets are cash in hand, debtors, stock etc.

Question 4.
Justify a reason either for or against each of the following:
(a) Introduction Stage in a Product Life Cycle is not very risky. [2]
(b) Accounts should disclose all material information (with reference to the concept of accounting). [2]
(c) Recruitment is a process of elimination.   [2]
(d) Branded goods are normally sold by inspection.  [2]
(e) Training reduces employee absenteeism.   [2]
Answer:
(a) Introduction stage in a Product Life Cycle is very risky. It is the stage when product is launched for the first time in the market. It takes time for product to settle in the market and become readily acceptable to consumers. The sales and profit related to the product are, therefore, low. Competition is virtually absent, market is limited, prices are relatively high and little is known about the product innovation.

Growth in sales volume is at a low rate due to lack of knowledge on the part of consumers and limited distribution. Prices are usually high because of small scale of production and heavy promotional expenditure. There is high probable rate of product failure. Therefore, it is wrong to say that introduction stage in a Product Life Cycle is not very risky.

(b) Accounts should disclose all material information. The reasons for this disclosures are reporting on financial statements.

1. Everyone can understand the reporting on the financial statements relating to the economic affairs of the firm.
2. A thorough understanding of the change in the method of depreciation or method of valuation of stock, market value of investments and contingent liability.

(c) Recruitment is not a process of elimination because recruitment is the process of searching for and identifying the prospective employees and encouraging them to apply for jobs in the enterprise. It involves seeking and attracting adequately qualified people from which suitable candidates can be selected.

(d) No, Branded products/goods are not sold by inspection. These goods are sold by there trademark, brand name etc. A brand is a name, term, symbol or design or a combination thereof used to identify the goods and services of a seller and to differentiate them from those of competitors.
For example, Lux Soap, Colgate toothpaste, Titan Watches. These all products are sold with there brand names.

(e) Training reduces employee absenteeism :
Yes, it is true. Training reduces employee absenteeism as trained employees feel more satisfied and interested in doing their jobs. Effective training improves the self-confidence and job satisfaction of employees. They take greater interest in their work and feel a sense of security which reduces labour turnover and absenteeism.

Section – B (60 Marks)
Attempt any four questions from this Section

Question 5.
(a) Modem marketing has created several non-traditional markets. Explain the main types of non-traditional markets.   [5]
(b) Explain the advantages of branding to producers and consumers.   [5]
(c) Explain the Maturity stage and Decline stage of a Product Life Cycle.  [5]
Answer:
(a) Modem marketing has created several non-traditional markets. The main types of non-traditional markets are as follows:
(i) Catalogue Market :
In this market, products are kept in the showroom along with a catalogue, which contains the details of goods and their prices. Customers select goods after reading the catalogue and examining the samples. In order to attract a higher volume of sales, catalogue markets sell goods at heavy discounts. Nowadays, items like luggage, watches, home appliances and so on are sold through catalogue markets.

(ii) In-House Market :
Door-to-Door sales persons visit the homes of consumers and offer products to them. Before the visit, initial contact may be created through telephone or mailed-in-coupon. This is an effective method and offers great convenience to the customer. In India, Eureka Forbes is selling its water filters and vaccum cleaners through this method. This is’however, a time-consuming and costly method.

(iii) Mail Order Market :
In this market, the seller mails price lists and other publicity materials to the prospective buyers. Customers place order after reading advertisements and the mailed literature. Goods are despatched through V.RR or courier.

(iv) Automatic Vending Machines :
Well known brands of products of daily use are sold through vending machines. These machines are installed at workplaces, schools and public places. Customers insert coupons/cash in the machines and collect the product. Vending machines are used to sell cold drinks, tea, coffee, candy, snacks, and so on. In Delhi, Mother Dairy sells milk through vending machines.

(v) Telemarket:
This is selling through television. The products are demonstrated on television. Customers place order on a toll-free number and get their products delivered at home through courier. “Asian Sky Shop” is leading company selling products by this method.

(b) Advantages of Branding to Producers are :

1. Product Differentiation : Branding is a means of differentiating the product from the competitors products. This helps the firm to secure and control the market for its product.
2. Facilitates Advertising : Branding helps in advertising. A firm can create a market preference for its product (Brand loyalty) by continuously repeating the brand name in its advertisements. Lux, Coca- Cola have become household names due to brand advertising.
3. Lower Selling Costs : Branding helps to minimise selling costs by reducing dependence on middlemen. Dealers are ready to handle branded products at lower margins.

Advantages to Consumers:

1. Product Identification : Branding helps customers in identifying and recognise the product. It simplifies, therefore, purchase and sale reduces the time and effort involved therein.
2. Protection : Prices of branded and standardised products are fixed by the manufacturer. They are printed on the product and become well-known to consumers.
3. Ensures Quality : Branding ensures uniform standards of quality and design to customers. Branded products as well packed to prevent adulteration.

(c) (i) Maturity Stage:
During this stage, sales continue to grow but at a decreasing rate. Competition increases further and markets get stabilised. The product is known all over the market and a third level market (low income group) may emerge. Due to competition prices are reduced but promotional expenditure remains high.

As a result profits decline and marginal producers are forced to go out of the market. Manufacturers broaden their lines and new models of the product are introduced. Supply exceeds demand for the first time. After some time there is saturation in the market. There is no possibility of increase in sales and the sales curve is levelling off.

For products with long-run demand, maturity stage may last for a long period. But sooner or later product demand starts declining as new products we introduced in the market. Thus, this stage is characterised by product differentiation, product improvement and identification of new market segments.

The maturity stage may be lengthened by using the . following strategies :
(a) Differentiating the product from competitive products.
(b) Focussing on brand image.
(c) Extending the warranty period, e.g., life time warranty for typewriters.
(d) Introducing reusable packaging.
(e) Developing new markets.
(f) Finding new uses of the product.

(ii) Decline Stage :
This stage is characterised by either the product’s gradual displacement by new and superior products or change in consumer’s buying behaviour. Sales fall down sharply and promotional expenditure has to be reduced drastically to minimise loss. The emphasis is on efficient distribution at lowest cost. Unless new uses of the product are found the sales may decline rapidly and the product may soon go out of the market.

The following strategies may be used to avoid sharp decline in sales:
(a) New features may be added to the product.
(b) Economy models of packs may be introduced to revive the market.
(c) New and attractive packaging may be used to attract customers.
(d) Selective promotion may be adopted to reduce distribution costs.

Question 6.
(a) Explain briefly the various elements of cost. [5]
(b) Explain: [5]
(i) The Dual Aspect Principle
(ii) The Going Concern Concept
(c) Write five differences between Receipts and Payments Account and Income and Expenditure Account. [5]
Answer:
(a) The various elements of cost:
There are three basic elements of cost : (i) Material; (ii) Labour; and (in) Expenses. All the three elements are further divided into two categories ; (a) Direct; and (b) Indirect. The direct cost is also known as Prime Cost which is a sum of Direct Material, Direct Labour and Direct Expenses. Indirect cost is known as Overheads. The elements of cost are shown in diagram.

(i) Material Cost:
Material cost refers to the cost of substances from which the product is made. Materials enter into the production process and form part of the finished product. For example, paper used in book. Materials can be divided into two categories :
(a) Direct Material: All materials which become an integral part of the finished product and which can be easily measured and directly charged to the product are called direct material.

(b) Indirect Material: Indirect materials are those materials which cannot be directly assigned to the specific product but which can be apportioned. For Example : Oil, Nails, Small tools etc.

(ii) Labour Cost :
The cost of human effort required for converting the material into the finished product is called labour cost. It is the aggregate amount of remuneration paid to workers, supervisors and managers. Labour can be direct or indirect.
(a) Direct Labour: The labour which can be wholly and directly identified with a particular product is called direct labour, e.g., wages paid to the machine operator or wages paid to the carpenter in furniture factory.

(b) Indirect Labour : Indirect labour means the labour which cannot be wholly and directly identified with a particular product. It is the labour employed for performing tasks incidental to manufacture. Wages paid to storekeeper, foremen, timekeeper, inspectors, etc., are examples of indirect labour.

(iii) Expenses :
Costs incurred other than on material and labour for production and distribution and for management of the organisation are called expenses. Expenses may be direct or indirect as follows :
(а) Direct Expenses : The expenses which can be wholly and directly identified with a particular product are called direct expenses. Hire charges of a machine used for a particular job, rent of the room in which a specific product is being produced are examples of direct expenses.

(b) Indirect Expenses: Indirect expenses are those expenses which cannot be wholly and directly identified with a specific product or job. These expenses include factory expenses, office expenses and selling expenses.

Indirect expenses are also known as overheads. Overheads are of three types :

1. Factory or Manufacturing Overheads: Materials: Oil, Consumable Shores etc. Labour : Salary of Storekeeper etc.
   Expenses : Power and fuel etc.
2. Office and Administrative Overheads : Materials: printing stationary etc.
   Labour: Salaries of office managers, clerks etc. Expenses : Office rent, legal expenses etc.
3. Selling and Distribution Overheads : Materials : Price list, catalogues etc.
   Labour: Sales Commission etc.
   Expenses : Advertising, rent etc.

(b) (i) The Dual Aspect Principle :
According to this principle, every business transaction has a double (dual) effect on the business. This double effect can be recognized only by recording both the aspects of every transaction. There are two sides of every transaction.

If one account is debited, any other account must be credited and vice-versa. The system of recording transactions on the basis of this principle is known as Double Entry System. It is due to this principle that the two sides of the Balance Sheet are always equal.

The following accounting equation will always hold good at any point of time.
Assets = Liabilities + Capital
OR
Capital = Assets – Liabilities
Whenever a transaction is recorded it must be recorded in two or more accounts to balance the equation. If a transaction increases or decreases one side of the equation, it will also decrease or increase the other side of the equation by the same amount. For example, if Rahul starts business with ₹ 1,00,000 in cash and takes a loan of ₹ 50,000 from the Bank and these ₹ 1,50,000 are used in buying a factory, the equation in this case is :
Assets = Liabilities + Capital
₹ 1,50,000 = ₹ 50,000 + ₹ 1,00,000

(ii) The Going Concern Concept:
It is assumed that the business will continue to exist for a long time in the future. Transactions are recorded on the assumption that the business will exist for an indefinite period of time. It is on this assumption that a distinction is made between capital expenditure and revenue expenditure. Market value of fixed assets is not recorded, as these assets are not to be sold in the near future.

A firm is said to be a going concern when there is neither the intention nor the necessity to wind up its affairs. In the absence of this assumption no outside parties would enter into long-term contracts with the firm for supplying funds and goods. This assumption also justifies the distinction between fixed assets and current assets. The going concern concept also implies that the existing liabilities will be paid at maturity. Unsold stock of goods are taken to the next year.

(c) Distinction between Receipts and Payments Account and Income and Expenditure Account

Basis of Distinction	Receipts and Payments Account	Income and Expenditure Account
1. Nature	It is a summary of cash receipts and cash payments.	It is like the Profit and Loss Account of a trading concern.
2. Type of Account	It is a real account.	It is a nominal account.
3. Objective	It is prepared to know cash balance at the end of the year.	It is prepared to ascertain surplus at the end of the year.
4. Nature of Items	It contains both capital and revenue items.	It contains only revenue items.
5. Opening Balance	It starts with the opening balance of cash in hand and at bank.	It has no opening balance.
6. Closing Balance	Its balance at the end shows the cash in hand and at bank (or overdraft) at the end of the year.	Its balance at the end shows the surplus or deficit for the year.
7. Accrued / Outstanding Items	It contains only cash items and does not include accrued income, income received in advance, outstanding or prepaid expenses.	It is prepared on accrual basis and therefore includes all accrued and outstanding items.

Question 7.
(a) Explain any two functions of the Reserve Bank of India. [5]
(b) Explain ‘SelectionInterview’and‘CheckingReferences’ as steps in the selection procedure. [5]
(c) Explain: [5]
(i) Industrial Advertising
(ii) Concept Advertising
Answer:
(a) Central bank means the bank which regulates the entire banking system in a country and carries out its monetary policy. Central bank is the apex bank, and every country has a central bank. Reserve Bank of India is the central bank of our country. It was set up in 1935 under the Reserve Bank of India Act, 1934. As the central bank, the Reserve Bank of India performs the following functions:

(i) Monopoly of Note Issue:
Generally the central bank of a country has the monopoly to issue currency notes. Government grants the exclusive right to the central bank to issue notes on its behalf. In India, one rupee notes are issued by the Ministry of Finance. All other currency notes are issued by the Reserve Bank of India. In order to inspire public confidence in paper currency, the central bank keeps reserves of gold and silver against the issue of notes.

(ii) Controller of Credit:
Commercial banks create credit by lending money. They may create too much or too little credit. The level of credit in the country causes fluctuations in the price level. It becomes necessary to exercise control over credit so as to ensure stability in the economy. The central bank exercises strict control on the credit granting capacity of commercial banks. This is the most important function of a central bank. Credit control is both qualitative and quantitative in nature.

(iii) Lender of the Last Resort:
Whenever a commercial bank needs financial assistance, it may borrow from other commercial banks. But other commercial banks may not be in a position to provide funds to the bank in need. In such a case the central bank provides funds to a commercial bank either by granting loans or by purchasing its securities. In this way the central bank acts as the lender of the last resort.

(b) Selection Interview : Interview serves as a means of checking the information given in the application forms and the tests results. It also provides an opportunity to the candidates to enquire about the job during interview. Managers get an opportunity to take a decision about their suitability for employment.

Selection interview should be conducted in an atmosphere which is free from disturbance, noise and interruption. Interview should be conducted in great depth to judge the suitability of the candidates.

There are no hard and fast rules of interviewing candidates. Interviews, in general, can be conducted in the following ways :
(i) Structured or Patterned Interview :
In such an interview different sets of questions having the same pattern and with the same difficulty level, are framed in advance. Different candidates are asked different series of questions.

(ii) Unstructured or Non-directive Interview :
In this interview, questions to be asked are not planned in advance. Questions pertaining to the job are asked and candidates are asked to respond freely to show their ability for the job.

(iii) Stress Interview:
This interview is held to note how thick-skinned the candidate is. The candidates are asked awkward questions and it is seen how they react to such questions. If they do not lose their balance of mind, they prove their worth as suitable candidates.

(iv) Group Interview :
In this interview, a number of candidates face the interview committee together. The candidates are asked to opine on an issue or they are asked to discuss a topic.

Checking References:
References are generally required to enquire about the conduct of those persons who have been found suitable in the interviews and tests. References can be collected from the previous employers, colleges last attended or from any other reliable source.

Before forming a balanced opinion, it is necessary to enquire from three to five persons about the conduct of the prospective employee. However, this exercise may not always produce the desired results because; (i) no candidate will cite the name of a referee who might speak unfavourably about him; (ii) the referee may not always respond; and (HI) due to a prejudice the referee may deliberately speak against the candidate.

(c) (i) Industrial or Business to Business Advertising :
An advertisement, which is directed at businesses or industrial buyers, is known as industrial or business to business advertising. Advertisements for printing machines, oil expellers, plastic moulding machines,
other manufacturing machines and equipments, agricultural appliances, raw materials, etc., fall in this category of advertising.

(ii) Concept Advertising:
This is also known as primary demand advertising or ‘pioneering advertising’. It is designed to stimulate demand for a new product. It explains product’s special or distinctive features and benefits. It is aimed at creating a general demand for the product category, without emphasizing the brand name.

In recent years, primary demand or pioneering advertisements have been running for personal computers (PCs), pagers, cellular phones, fax machines, answering machines (to be attached with the telephones) etc. Advertisements for creating primary demand for diamond is like this: “A diamond is for ever.” For creation of primary demand for gemstones : “Coloured gemstones are an expression of you.”

Question 8.
(a) Write short notes on : [5]
(i) Bhopal Gas Tragedy
(ii) Chernobyl Disaster
(b) Describe the role of Sales Promotion and Publicity in promoting a brand. [5]
(c) Explain Persuasion as an element of Public relations and mention any two principles of persuasion. [5]
Answer:
(a) (i) Bhopal gas tragedy-an Industrial disaster :
On 3rd December 1984, the worst Bhopal gas industrial accident happened in Union Carbide’s pesticide manufacturing unit in the industrial town of Bhopal, India. About 45 tons of highly toxic and reactive methyl isocyanate (MIC) gas leaked out of the tank for nearly two hours and escaped into the air, spreading within a radius of eight kilometers, over the city inhabited by 900,000 people.

3,800 people died immediately while 100,000 to 200,000 people were reported with eye problems, respiratory difficulties, cardiac failure, immune and neurological disorders. Spontaneous abortions, stillbirths and offsprings with genetic disorder are still being found even after so many years of this incident.

(ii) Chernobyl Disaster :
The Chernobyl disaster was a worst radioactive accident occurred on April 26, 1986 at the Chernobyl Nuclear Power Plant in Ukraine, in the former USSR. The accident, caused by a sudden surge of power, destroyed the reactor and released massive amounts of radioactive material into the environment.

There were a numerous, fires and explosion, which killed more than 30 people immediately. Due to radiation, pine forest in the immediate vicinity of reactor turned brown and died. Even drinking water got contaminated. The people that have lived in the Chernobyl area were diagnosed with radiation sickness and there has been a dramatic increase in the number of thyroid cancers among children and adolescents.

This is due to drinking milk from cows that ate contaminated grass immediately after the accident. This incident clearly exposes the flaws in safety measures in nuclear plants.

(b) Brand promotion mix is the company’s total marketing communication programme. It consists of certain promotion tools that company uses to inform, persuade, remind and influence its customes.
The four major tools are used for brand promotion are Advertising, Personal Selling, Sales Promotion and Publicity. We explain two tools, i.e., Sales Promotion and Publicity.

(i) Sales Promotion :
Sales promotion refers to those short-term incentives that encourage or attract customers to buy the brand without any delay. Advertising provides reasons why to buy a particular brand. Whereas, sales promotion offers reasons to buy a brand “now”, i.e., immediately and without any delay. Because if you do not buy “now”, then you lose the incentives which are, in fact, available only for a specified short period.

Of all the methods of brand promotion, sales promotion is the only method that makes use of offering incentives. It is a type of non personal selling that supports the advertising. All brand promotion activities which do not clearly fall into advertising personal selling or publicity, are included in sales promotion.

The basic goal of sales promotion is to increase the volume of “immediate” sales or to clear the stocks lying for sometime in the shop or store. The various types of incentives used for this purpose are: percent- off, special discount, free gifts, free extra quantity in the pack, three for two offer (take three, pay for two), coupons, contest etc.

(ii) Public Relations and Publicity :
Public relations means firm’s communication and good relations with its various publics. Good relations are built in several ways, such as : by obtaining favourable publicity, building a good ‘corporate image’, handling or keeping off unfavourable rumors or events, etc.

The various publics of a firm include : customers, employees, shareholders, suppliers, government and its agencies, investors, financiers, the society in which it operates etc. Public relations activities are typically designed by the firm to build or maintain a favourable image for the firm and a favourable relationship with its various publics. Use of media is not necessary for good public relations. Quick and correct disposal of customer complaints may be an effective tool for creating customer relations.

(c) Persuasion:
Persuasion is an important element of public relations. It is through some kind of communication that persuasion takes place. To persuade means to convince another person of some idea, product, service or institution, to induce a person or group or to do something.

We are all engaged in persuasion. The young man is persuading his beloved to marry him. The teacher is persuading his students to learn. The politician is persuading the voters to vote for him and his party.

There are two forms of interaction between individuals and groups – force and persuasion. When one person compels another to do something if is interaction through force. This form of interaction is considered as an improper conduct in a civilised society. Interaction through persuasion involves convincing the other person. This is considered the right conduct.

A flexible approach is helpful in persuading others. Before engaging in persuasive communication, a person must settle a few questions in his mind : What do I want to accomplish ? What are the interests of the people to whom I shall be talking ? What are the facts I should tell them ? A sense of human interest is necessary for anyone indulging in persuasion. The speaker has to ensure that people understand, approve and accept him and his words. Experts have identified the following principles of persuasion:

(a) Acceptance of the message is a critical factor in persuasive communication. Therefore, to change attitudes of people, suggestion for change must first be received and accepted.
(b) A suggestion is more likely to be accepted if it is in conformity with needs and desires of people.
(c) A suggestion is more likely to be accepted when it is in harmony with group norms and loyalties.
(d) A suggestion in the mass media should be reinforced with face-to-face interaction.
(e) A suggestion is more likely to be accepted when the source is perceived as reliable or expert.

Question 9.
Case Study
Patanjali Ayurved Ltd. (PAL) is an FMCG company established in 2006 by Acharya Balkrishna and Baba Ramdev. It is located in the industrial region ofHaridwar. It was started with the objective of promoting the ancient science of Ayurveda in coordination with the latest technology. It manufactures mineral and herbal products and offer healthcare solutions.

They started as a small company, but their revenue kept growing from 163 crores in 2009-10 to 5000 crores in 2015-16 and they are targeting for 10000 crores in 2016-17.

They manufacture products using Ayurveda and natural components. Their products are cheaper than alternatives in the market due to low production and marketing costs. They have over 4700 retail outlets and do a lot of online selling. They are also planning to open outlets at railway stations and airports. They are now tying up with various other retail chain stores like Future group retails, Modem trade stores, Reliance retail, Hypercity and Star Bazaar.

With reference to the above:
(a) Name and discuss the pricing strategy used by Patanjali Ayurved Ltd. (PAL). Why has this strategy been successful ? [5]
(b) PAL’s target is to double their sales in the currentfinancial year. How do they plan to achieve this ? [5]
(c) PAL has not been using sales promotion techniques to increase their sales. Discuss any five such techniques that you feel would help the company to achieve its sales target. [5]
Answer:
(a) Patanjali Ayurved Ltd. (PAL) used Penetrating Pricing Strategy. In this strategy, they set low price in the initial stage so as to make the brand quickly popular and to maximise the market share. Many firms used this strategy while launching fast moving consumer products. The policy results in high sales volume during the initial stages of a product’s life cycle.

This strategy is successful because in initial stage product is sell at low price to capture the market trend and catch the customers attention.

(b) PAL’s target is to double their sales in the current financial year because they manufacture Ayurvedic and natural product at cheaper rates. They sell their products online to promote their products and tie up with die various retail chain stores like Future group retails, Modem trade stores, Reliance retail etc.

(c) Sales promotion techniques are used to increase their sales. These are as follows :
(i) Distribution of samples :
Under this method, free samples of products are distributed. Consumers use these samples and they purchase it regularly, if it gives them satisfaction. This method is generally used for products of daily use like tea, soap, detergents, toothpaste etc.

(ii) ‘Money ofT coupons:
It is a kind of certificate telling that the product mentioned there can be obtained at a specified discount. Possession of a coupon motivates the consumers to buy that product.

(iii) Premium or bonus offer :
A premium offer is the offer of an article free of cost on the purchase of a specified quantity of a product. For example, one bathing soap may be given free on purchase of two bathing soaps.

(iv) Prize contests :
The manufacturer of a product organises a contest among the retailers by which the retailers who cross the targeted sales are given an opportunity to take part in a contest which has prizes like Malaysia tours.

(v) Money refund :
In this case, the seller refunds a part of price paid by the customer on the production of some proof of purchase. For example, a producer may offer to refund ? 10 on sending the cash memo or wrapper of the product.

Question 10.
Mr. Raj is a newly appointed Human Resource Manager of the Hyderabad branch of a foreign bank. The bank is looking for a rapid expansion of its business in the Southern region. So it wants to recruit, select new employees and launch various schemes and offers. Being an organisation of repute, it is highly essential to select efficient people who will be able to contribute effectively to the growth of the business. The entire responsibility of developing a good work force for business expansion in the region is entrusted to Mr. Raj.

With reference to the above:
(a) Name the key function ofHuman Resource Management which Mr. Raj is expected to perform. Mention the key activities under this function. [5]
(b) Describe any two roles of Human Resource Management. [5]
(c) Briefly explain any five tests required for selecting employees. [5]
Answer:
(a) The key function of Human Resource Management which Mr. Raj is expected to perform is Procurement function. The key activities performed under this function are as follows:
(i) Job Analysis :
It is the process of studying in detail the operations and responsibilities involved in a job so as to identify the nature and level of human resources required to perform the job effectively. Job descriptions and job specifications are prepared with the help of information provided by job analysis.

(ii) Human Resource Planning :
It is the process of estimating the present and future manpower requirements of the organisation, preparing inventory of present manpower and formulating action programmes to bridge the gaps in manpower.

(iii) Recruitment:
It is the process of searching for required personnel and stimulating them to apply for jobs in the organisation. A proper balance should be maintained between the internal and external sources of recruitment.

(iv) Selection :
It implies judging the suitability of different candidates for jobs in the organisation and choosing the most appropriate candidate.

(v) Placement :
It means assigning suitable jobs to the selected candidates so as to match employee qualifications with job requirements.

(b) The role of human resource management can be discussed at four levels — corporate, professional, social and national. Here, we explain two rules of HRM :
1. Significance for an Enterprise :
Human resource management can help an enterprise in achieving its goals more efficiently and effectively in the following ways:

1. Attracting and retaining the required talent through effective human resource planning, recruitment, selection, placement, orientation, compensation and promotional policies.
2. Developing the necessary skills and right attitudes among the employees through training, development, performance appraisal, etc.
3. Securing willing cooperation of employees through motivation, participation, grievance handling, etc.
4. Utilising effectively the available human resources.

2. Professional Significance :
Effective management of human resources helps to improve the quality of work life. It permits team work among employees by providing a healthy working environment. lt contributes professional growth in the following ways :

1. Providing maximum opportunities for personal development of each employee.
2. Maintaining healthy relationships between individuals and different work groups
3. Allocating work properly.

(c) The main types of selection tests are as follows:
(i) Intelligence Tests :
These tests are used to measure a person’s capacity for reasoning and comprehension in terms of his memory, vocabulary, mental alertness, capacity to grasp and to put together the elements of an abstract situation. A candidate’s IQ (Intelligence Quotient) or mental alertness can be estimated through intelligence tests.

(ii) Aptitude Tests :
Such tests seek to measure a candidate’s capacity to learn particular skills and his potential abilities.

(iii) Trade Tests :
These tests are designed to measure the applicant’s level of knowledge and skill already achieved in a particular trade or occupation. For example, candidates for the job of a typist may be asked to type a page so as to judge their speed and accuracy. Trade tests are also known as performance tests, proficiency tests or achievement tests.

(iv) Interest Tests :
Such tests are employed to find out the preferences of an individual for a certain type of work.

(v) Personality Tests :
These tests are aimed at finding out emotional balance, maturity, temperament, etc., of the candidate.

Solving ICSE Class 10 Commercial Studies Previous Year Question Papers ICSE Class 10 Commercial Studies Question Paper 2014 is the best way to boost your preparation for the board exams.

ICSE Class 10 Commercial Studies Question Paper 2014 Solved

Section – A (40 Marks)
(Attempt All Questions)

Question 1.
Distinguish between:
(a) Formal Communication and informal Communication. (2)
(b) A Product and a Service. (2)
(c) Standardisation and Grading. (2)
(d) Direct Labour Cost and indirect Labour Cost. (2)
(e) A Warehouse Receipt and Warehouse Warrant. (2)
Answer:
(a) Difference between Formal Communication and Informal Communication:

Formal Communication	Informal Communication
1. Foramal communication is authorised and well- planned.	1. Informal communication is unauthorised and unplanned.
2. Formal Commun-ication is generally written.	2. The informal communication is generally oral or verbal.
3. Formal communi-cation refers to the flow of information through the chain of command.	3. Informal communication refers to the interchange of information between people through informal and unofficial channels

(b) Difference between a Product and a Service:

A Product	A Service
Product means anything that can be offered to a market for attention, acquisition, use or consumption that can satisfy a want or need. It consists of physical objects or tangible and intangible attributes such as colour, package, manufacturer’s name, etc. For example : pen, car, refrigerator, house, etc.	Service means an intan­gible act or performance that can satisfy some human need and can be offered for sale. For example : beauty parlour, dry cleaning, nursing home, courier firm, etc.

(c) Difference between Standardisation and Grading:

Standardisation	Grading
Standardisation is the process of making goods perfectly identical to the model product. In this case, the product contains certain desirable qualities like durability, safety, utility and special features such as design, weight, colour and size.	In case of Grading, a product is classified into identical lots and groups on the basis of predetermined standards. Grading divides products into different classes of uniform characteristics.

(d) Difference between Direct Labour Costs and Indirect Labour Costs:

Direct Labour Costs	Indirect Labour Costs
Labour which is directly consumed in the process of production. It is also known as productive or operating labour. e.g., Wages.	Labour which indirectly helps in the production process, which cannot be easily traced. e.g, Salesman’s Salary.

(e) Difference between Warehouse Receipt and Warehouse Warrant:

Warehouse Receipt	Warehouse Warrant
1. Warehouse receipt is a only acknowledgement receipt of the goods.	1. Warehouse warrant is a warrant in favour of owner of goods.
2. Warehouse receipts is not transferred.	2. Warehouse warrant can be transferred by simple endorsement and delivery.

Question 2.
(a) Stare any two advantages of branding. (2)
(b) How do group discussions help in the selection process of suitable candidates for employment? (2)
(c) State two limitations of a budget. (2)
(d) What is meant by an ‘overdraft ‘facility given by a Commercial Bank? (2)
(e) Mention any two objectives of Training. (2)
Answer:
(a) Advantages of Branding:

1. It saves time and efforts of consumers as they can identify and recognise the product to be purchased.
2. Branding is the basis of advertising and other techniques of mass selling.
3. Branding ensures uniform standards of quality and designs to consumers.

(b) The two uses of group discussions in selecting employees for a concern are as follows :

1. In an Interview, the candidate gets no opportunity to participate and show his leadership ability.
2. Group discussion is widely used to screen candidates for admission into management schools.

(c) Two limitations of a budget:

1. Budget estimates are generally based on the price level at a particular point of time. These estimates may become meaningless when there is either inflation or depression in the market.
2. In order to keep with in budget limits, they may overlook the goals of the organisation. In such cases, budgetary goals supersede enterprise goals and budgets obstruct the attainment of objectives.

(d) Overdraft means an arrangement under which a current account holder is allowed to withdraw more than the balance to his credit up to the specified limit. Overdraft is allowed for a short period and interest is charged on it. Commercial Banks provide overdraft facility on the security of some assets or on the personal security of the account holder.

(e) The main objectives of training are as follows :

1. To prepare employees for the right jobs by imparting the required knowledge and skills.
2. To enable employees to work more efficiently on their present jobs by exposing them to the latest concepts and techniques.

Question 3.
(a) State any two disadvantages of Rail Transport. (2)
(b) State any two characteristics of an Ideal Warehouse.(2)
(c) What is a Provident Fund Scheme ? (2)
(d) What is meant by the term ‘Revenue Expenditure ? (2)
(e) How does a ‘Status barrier ’affect Effective Communication ? (2)
Answer:
(a) Two disadvantages of Rail Transport:

1. Door-to-door service is not possible. Its services are available only between certain definite points.
2. Railway transport is not suitable for carrying perishable and fragile goods due to frequent and careless handling of goods.

(b) Two characteristics of an Ideal Warehouse:

1. It must be centrally located so that loading, unloading and transportation of goods takes minimum time and cost.
2. Goods should be protected from heat, cold, water, insects, corrosion, fire and theft of goods.

(c) Provident Fund Scheme : Under this scheme, the employee and the employer contribute every month ten per cent of the basic wages. The total contributions are invested in specified investments. The accumulated amount of standing credit to an employee is payable on retirement, death or at the time of leaving service. An employee can get advances and permanent withdrawals for construction of house, marriage of dependents and other specified purposes, like serious illness.

(d) Revenue Expenditure : This expenditure relates to normal functioning of the government departments and provision of various government services. The main examples of such expenditures are salaries, pensions, interest, subsidies, grants to the state governments, etc., are known as Revenue Expenditure. These expenditures are incurred to maintain the general services of the government like defence, law and order, administration and to provide various social services (education, health, etc.) and economic services (agriculture, industry, power, transport and communications, etc.)

(e) Status Barriers: Superior-subordinate relationship in the formal organisation structure may obstruct free flow of information. A manager may convey only selected information to his subordinates so as to maintain status difference. He may feel that if he communicates problems or results which reflect his ability and judgement, his position as a superior would be undermined. Similarly, subordinates tend to convey only those things which the superiors would appreciate.

Thus, status creates filtering and distorts downward and upward communications.

Question 4.
(a) Briefly explain any two elements of a Promotion Mix. (2)
(b) Give two reasons for workers joining a Trade Union. (2)
(c) What is meant by Orientation or Induction Training? (2)
(d) What is ‘Discounting of Bill of Exchange ’? (2)
(e) Explain ‘contribution ’ as a principle of an Insurance contract. (2)
Answer:
(a) Two elements of a Promotion Mix :

1. Advertising: It is non-personal communication, which is paid for by an identified sponsor. It is aimed at promoting ideas (no smoking), products (LG-television) or services (BSNL mobile).
2. Publicity : It is non-paid form of non-personal communication. This is like advertising except that advertising is paid for and it is not. Publicity takes place when media in the form of news, covers some event and information is disseminated about something free of cost.

(b)

(i) Protection : Trade unions safeguard workers against all sorts of exploitation by the employer and political parties. A union provides protection from unfair labour practices and atrocities of management. It also tries to revise the status of workers in industry and society. Trade unions resist retrenchment of their members and help to ensure steady employment for workers. Unions serve as a check on arbitrary action by employers.

(ii) Economic Security : Unions protect their members from various economic hazards such as illness, accidental injuries, unemployment. They secure compensation from employers. Unions also provide financial assistance to workers during distress.

(c) Orientation or induction training refers to the training given to new employees to familiarise them with the policies, rules and regulations of the organisation and the conditions of the job.
A systematic orientation programme enables the new employees to adjust quickly to new surroundings and people.

(d) Bank purchases bills of exchange at the face value and less the interest at current rate till its due date. This is called discounting of bills. The owner of the bills can get cash immediately and need not to wait for payment until the bills fall due.

(e) Contribution : The principle of contribution is another corollary of the doctrine of indemnity. It implies that when property is insured for the same risk with two or more insurers, the different insurers will contribute to the total payment in proportion to the amount assured by each. In case one insurer has paid the full compensation for loss, he is entitled to receive proportionate contribution from other insurers.

Section – B (40 Marks)
(Attempt any four questions from this section)

Question 5.
(a) Write any five expectations of the General Public or Society from a Business Enterprise. (5)
(b) State any five objectives of marketing. (5)
Answer:
(a) The expectations of the General Public or society from a business enterprise are as follows :

1. To protect the environment from all types of pollution.
2. To produce socially desirable products in accordance with national interest and priorities.
3. To help weaker sections of the society by giving them preference in employment and other fields.
4. To preserve social and cultural values.
5. To respect human rights including rights of women and children.

(b) Five Objectives of Marketing :

(i) Customer satisfaction : The primary objective of marketing is to satisfy the needs of consumers by producing the right products and services at the right time, right place and right price. All marketing activities are guided by information concerning what customers expect from business. No business enterprise can survive and grow in the long run unless it provides full satisfaction to consumers

(ii) Profitability : A business enterprise is an economic institution. It must earn profits otherwise it cannot survive and prosper. But profits should be achieved through customer satisfaction. According to Philip Kotler, “Now the key is not to aim for profits as such but to achieve them as a by-product of doing the jobs well.”

(iii) Coordination and integration : Marketing must aim at bringing about an effective coordination and integration between product, price, promotion and distribution. It must also ensure coordination between marketing and business activities such as manufacturing, finance, personnel, etc.

(iv) Service to society: Marketing should focus on improving the quality of living of people by providing a wide variety of quality products and services at reasonable prices.
According to Malcom McNair, “Marketing is the creation and delivery of a standard of living to society”. Marketing should also be oriented towards conservation of national resources and protection of environment.

Question 6.
(a) State five benefits of Advertising to manufacturers/dealers. (5)
(b) What is meant by ‘Sustainable Development’? Explain any two examples of sustainable use of resources. (5)
Answer :
(a) Benefits of Advertising to Manufacturers: Advertising is beneficial to the manufacturers in the following ways :

1. Steady Demand: Advertising creates regular demand by smoothening out seasonal and other fluctuations. It helps in increasing and maintaining steady demand for a particular article and ensures continuity of production on a large-scale.
2. Increases Sales: Advertising acts as an aid to selling. It increases sale of all products and services. Goods produced on a large scale are sold by the methods of mass presentation through advertising.
3. Support to Dealers and Salesmen : Advertising prepares the necessary ground for the success of the efforts of the dealers or salesmen for selling the goods because it creates awareness, interest and demand for the product. It makes it easier for the salesman to approach the potential customers as they have already been familiarized with the product through the advertisement.
4. Helps in Introducing New Products: Advertising helps in the replacement of old habits and traditions by new and better goods and methods of use. Repeated advertisement through proper media helps the manufacturer in creating awareness and gaining acceptance of their products by the consumers. It may educate the consumer about the use of the new products or the new uses of the old products.
5. Market Expansion : Advertising enables the manufacturer to expand the markets for his products. It helps him not only in retaining the old markets but also in entering and capturing the new markets. Repeat advertising carries a very forceful sales message to the prospective customers residing in remote and inaccessible areas.

(b) Sustainable development means the development that meets the needs of present generations without compromising the ability of future generations to meet their own needs. For development to be sustainable, it must take into account social and ecological factors in addition to economic aspects of the living and non-living base both in the long run as well as the short term. Three main elements of sustainable development are well-being of the human society, well being of the environment and sustainability over time. Any component of nature which human beings need and value is called a resource. A country uses natural resources in order to develop. But development leads to over-exploitation and depletion of natural resources. No development can be sustained for a long period if it upsets the balance of nature. Therefore, development must include protection of our environment.

(i) Sustainable Use of Water:

1. Encourage and improve traditional methods of rainwater harvesting and storage.
2. Use drip irrigation and other water conservation measures in agriculture
3. Protect water in water bodies from effluents and toxic materials.
4. Check over exploitation of surface and ground water.

(ii) Sustainable Use of Energy :

1. Use alternative sources of fuel such as hydrogen, methanol, biogas, solar energy, etc.
2. Develop fuel efficient and smokeless chullahs.
3. Solar cooking does not bum any fuel and is the most eco-friendly option.
4. Solar cookers help to preserve forests, save foreign exchange spent on kerosene and cooking gas and to create employment opportunities.

Question 7.
(a) Explain the benefits of taking an Insurance Policy. (5)
(b) Explain any five objectives of Industrial Relations. (5)
Answer:
(a) Insurance offers the following benefits :

1. Protection : Insurance provides protection against several types of risks. Life insurance provides financial assistance to family in the untimely death of the policy holder.
2. Savings : Life insurance encourages the habit of thrift and savings. After taking an insurance policy, a person saves money to pay regular premium. On the maturity of the life policy, the insured receives a lumpsum. This amount can be utilised for higher education/marriage of children or construction of a residential house. Thus, life insurance serves as a means of protect in as well as a means of savings.
3. Financial aid : In case of financial need, the policyholder can take a loan against the policy. The loan can be repaid in easy instalments.
4. Provision for old-age : People can make financial provision for old-age by taking life insurance policies. They can lead their retired life happily and without depending upon their families for money.
5. Tax relief: Under the Income Tax Act, an income tax payer can reduce his tax liability by taking life insurance policy.

(b) The main objectives of industrial relations are as follows:

1. To develop and maintain harmonious relations between management and labour is essential for higher productivity of labour and industrial progress in the country.
2. To safeguard the interests of labour as well as management by securing the highest level of mutual understanding and goodwill between all sections in industry.
3. To establish and maintain industrial democracy based on the participation of labour in the management and gains of industry, so that the personality of every individual is fully recognised and developed.
4. To avoid all forms of industrial conflicts so as to ensure industrial peace by providing better working and living standards to workers.
5. To ensure a healthy and balanced social order through recognition of human rights in industry and adaptation of complex social relationships to the advancements in technology.

Question 8.
(a) Explain any two types of deposit accounts. (5)
(b) Explain five main characteristics of Communication. (5)
Answer:
(a)

(i) Savings bank account : For savings deposits an account is opened with the bank which is called savings account. This account is opened for non-trading customers with small amounts, say ₹ 300 without cheque facility, ₹ 500 with cheque facility. The main aim of these accounts is to develop the saving habit among common people. Such an account can also be opened by two persons in joint names. The account holders are allowed to withdraw money by cheque or by withdrawal form subject to the condition that they maintain a minimum balance in their accounts. Interest is paid on minimum monthly balance and credited to the respective accounts yearly or half yearly.

(ii) Recurring deposit account: This deposit has been started to encourage those people to save who cannot give large deposit in lumpsum. Recurring deposit can be opened with small amount over a specified period. The depositor keeps on depositing a certain sum of money every month. The number of monthly instalments may be 12,24,36,48,60 and so on. After the expiry of the period, the depositor gets back his money along with interest there on. Cheques cannot be drawn to withdraw money from a recurring deposit account.

(b) Five main characteristics of communication are :

1. Continuous process : Communication is an on-going process. Group activity requires regular flow of information and ideas among the members of the group.
2. Pervasive function : Communication is essential in all organisations and at all levels of authority. It is all pervading.
3. Circular process: Communication involves a circular flow of messages. The response to the message, called feedback, requires another message to be transmitted by the receiver of the original message. The response indicates the impact of communication.
4. Influencing human behaviour : The main purpose of communication is to influence human behaviour. It is a means of creating interpersonal relations. A manager creates motivation and loyalty among his subordinates by sharing information, opinions and feelings with them.
5. Mutual understanding : The basic purpose of communication is to create mutual understanding. Managers communicate to influence human behaviour and to obtain the desired response from employees. Communication is a means and not an end itself.

Question 9.
(a) Briefly explain any five utilities of a budget. (5)
(b) State any five tools or techniques of Brand Promotion. (5)
Answer:
(a) Utilities of a budget are :

1. Operationalise plans: Budget makes business plans operational. They serve as a means of implementing different plans, goals of an organisation and its basic plans cannot be converted into performance without budgets and other operational plans.
2. Higher efficiency: Budget brings efficiency and economy in the working of a business firm. They help management in obtaining the most profitable combination of different factors of production.
3. Sense of responsibility : Budget puts a sense of responsibility on the shoulders of management. Budget motivates them to act responsibly and escape from extravagance.
4. Source of motivation: The projected cost cuts results into the profit expansion. This acts as the motivation and leads an enterprise to stick to the budget.
5. Co-ordination : The various budgets made in the organisation are to be co-ordinated and should follow the same objectives. Hence it makes co-ordination mandatory.
6. Delegation of authority: The budget is prepared by the management but the responsibility to carry on the budget is vested to the respective department. Thus the budget helps to delegate the authority and fix the responsibility.
7. Effective control : Management keeps effective control and help the various departments in the organisation to keep an effective control and check on extravagance.
8. Sound planning : The good budget helps to have sound planning. This is also necessary for the organisation to have a sound planning structure.

(b) Tools or techniques of Brand Promotion are:

1. Advertising: It is non-personal communication, which is paid for by an identified sponsor. It is aimed at promoting ideas (no smoking), products (LG- television) or services (BSNL mobile).
2. Personal Selling : It involves direct face to face personal interactions between the sales person and potential customer. For instance, when Eureka Forbes salesman demonstrates, provides information, answers the questions and book orders. In this way he does personal selling.
3. Sales promotion : It includes a variety of non recurrent activities like coupons, samples, special discount offers etc. These stimulate trial or purchase immediately.
4. Publicity: It is non-paid form of non-personal communication. This is like advertising except that advertising is paid for and it is not. Publicity takes place when media in the form of news, covers some event and information is disseminated about something free of cost.
5. Quality Control : Brands become popular and continue to enjoy confidence of buyers only when quality of the brand is maintained.
6. 

Question 10.
The following is the Trial Balance of Ron Trading Co. on 31st March 2013.
Trial Balance as on 31.03.2013

The closing stock was valued at ₹ 9,000. Prepare a Trading and Profit and Loss Account and the Balance Sheet as on 31st March, 2013.
Answer:
Trading, Profit and Loss A/c for the year ending 31st March, 2013

Solving ICSE Class 10 Commercial Studies Previous Year Question Papers ICSE Class 10 Commercial Studies Question Paper 2013 is the best way to boost your preparation for the board exams.

ICSE Class 10 Commercial Studies Question Paper 2013 Solved

Section – A
(Attempt All Questions)

Question 1.
Distinguish between:
(a) Variable Cost and Semi- Variable Cost. (2)
(b) Savings Account and Current Account. (2)
(c) A Private Warehouse and a Public Warehouse. (2)
(d) A Production Budget and a Sales Budget. (2)
(e) A Brand and a Grade. (2)
Answer:
(a) Difference between Variable Cost and Semi-Variable Cost:

Variable Cost	Semi-Variable Cost
1. Variable costs are those costs which vary in amount that changes in the level of output or activity. Such costs increase and decrease in same proportion in which the level of output increases or decreases.	1. Semi-variable costs are those costs which vary but not in direct propor­tion to changes in the volume of production. They are a combination of fixed and variable costs.
e.g., Direct material cost and Direct labour cost.	e.g., Telephone charges – Rent remains fixed upto a limited no. of calls and variable with calls made thereafter.

(b) Difference between Savings Account and Current Account:

Saving Account	Current Account
1.  To develop habit of saving. 2.  Restrictions on number of withdrawals.	1. To carry on business dealings. 2. No restrictions on num­ber of withdrawals.

(c) Difference between Private Warehouse and Public Warehouse:

Private Warehouse	Public Warehouse
1.  Private warehouses are owned by manufacturers and traders to store the goods produced or purchased by them until they are sold out.	1. Public warehouses may be owned by Government, Public trusts and other public authorities.
Private warehouses are generally located in rural and suburban areas where space is available at low cost.	Public warehouses are located in places which are well connected by roads, railways, waterways and airways.

(d) Difference between Production Budget and Sales Budget:

Production Budget	Sales Budget
1.   It contains an estimate of the total production of a specific period of time.	1. It is a forecast of sales to be achieved during a specific period of time.
Production budget ensures sufficient stock for sales and to manufacture goods in the most economical manner.	Sales budget shows the breakup of total sales productive, territorywise and monthwise.

(e)
Difference between Brand and Grade:

Brand	Grade
It is a process of giving a different name to a particular product by which it is to be known and differentiated from the other similar products.	It is a process of sorting products according to their physical attributes. (i.e., shape, colour, size, quantity, etc.)

Question 2.
(a) Give any two methods used for On-the-Job training. (2)
(b) Explain indirect Cost’. (2)
(c) Why is gratuity given by an employer to an employee? (2)
(d) What is Trademark? (2)
(e) Give two examples of efficient and eco-friendly technology. (2)
Answer:
(a) Two methods of On-the-Job training are:

1. Coaching : Under this method the employee is trained on-the-job by his immediate superior.
2. Job Rotation : Under this method the employee is moved from one job to another at planned period of time. This exposure at different levels, makes the employee multi dimensional.

(b) Indirect Cost : It refers to those expenses which are not directly absorbed or chargeable in the process of production, e.g., rent of a factory building.

(c) Gratuity is a time based benefit given to an employee when he leaves his employment after having worked under a specific employer for certain number of years. It is a voluntary payment made by an employer to his employees as a loyalty bonus who retires or leaves the service after a long period of time with a dedicated service record. It grants security to the employees against the risk of old age.

(d) Trade Mark : A trademark must be

1. distinctive instead of descriptive
2. affixed to the item sold
3. registered with the appropriate authority to obtain legal ownership and protection rights. When a Brand name, mark or a symbol is legally registered it becomes a trade mark. Trade mark gives sellers exclusive rights to use the brand name or mark.

(e) Two examples of efficient and eco-friendly technology

1. Energy efficient technology is a form of eco-friendly technology because with increasing amount of coal or oil being used, not only will exhaust them but also increases the rate of green house gases. This is one main reason for adopting fuel efficient technology in almost all sectors of industry, which results in savings the natural resources for a longer time, providing alternate choice other than them.
2. Recycling is reusing substances or products. It is an efficient and environment friendly measures to conserve raw materials and nature, e.g., paper industry which turns waste paper into new paper products.

Question 3.
(a) State two expectations of Competitors or Associates from a business concern/enterprise. (2)
(b) Give any two suggestions to draw the attention of viewers to an advertisement ofa product/service marketed by your company. (2)
(c) Briefly explain the concept ‘Marketing Research ’. (2)
(d) What is meant by ‘the Clearing House Function’ of the Reserve Bank of India ? (2)
(e) Explain the term Brand Equity. (2)
Answer:
(a) Two expectations of competitors from a business concern :

1. To adopt fair trade practices regarding price, quality and service.
2. To promote co-operation and healthy competition.

(b) Two suggestions to draw attention of viewers to an advertisement:

1. It should have an conviction value to attract the attention of the viewers, otherwise without being noticed it would be a wasteful expenditure.
2. A good advertisement should educate the people by providing adequate knowledge about the product or service, which could help the potential customers to reach a buying decision and ease the usage after buying it.

(c) Marketing Research : May be defined as systematic gathering, recording and analysing all facts about marketing problems to facilitate decision making. It involves a careful and objective study of all aspects of marketing. Marketing research is wider term than market research which is a study of only those who
buy and distribute the products. Marketing research includes products study, consumer study, price study and distribution channels study.

(d) Clearing House Function of RBI: RBI settles the claims of commercial banks through a process of book entry in their respective accounts with RBI. It reduces the chances of financial crisis due to cash withdrawal when it is needed more.

(e) Brand Equity : It means the economic value associated with a brand strength to gain more and more brand loyalty. It gives an opportunity to capture and maintain a consistent market share. It provides stability to an organisation’s sales volume and stands for a certain level of quality in a customer’s mind.

Question 4.
(a) Distinguish between a Debit Card and a Credit Card. (2)
(b) State any two rights of a Consumer. (2)
(c) Write a short note on the Chipko Movement. (2)
(d) What do you understand by Audio-visual Communication? (2)
(e) State two advantages of Road Transport over Air Transport. (2)
Answer:

Debit Card	Credit Card
1.  The amount holder must have money in his account.	1.  The balance in the ac­count is not necessary.
2. As the card holder uses his own money.	2. As the card holder is granted credit by the bank up to a specific limit, on which interest is payable.

(b) Rights of Consumer

1. Right to Safety : This right protects the customers against the sale of goods which are hazardous to life and property, e.g., electrical equipments, gas cylinders, etc.
2. Right to be heard: The consumer is free to register his complaint regarding the product at appropriate forums.

(c) Chipko Movement: It is a tree-embracing movement started in April 1973 in Mandal Village in Uttrakhand against felling of trees by forest contractors. It is a spontaneous peoples movement started by the village women based upon non violent resistance reflecting awareness of the local people against environmental degradation. Mr. Chandi Prasad Bhatt and Mr. Sunderlal Bahuguna led the movement from the front.

(d) Audio-Visual Communication : Audio visual communication combine both sound and visual effects the information presented through this mean gives an interesting and attractive form to it, with a greater memorising value.

(e) Advantages of Road Transport over Air Transport:

1. Door-to-Door Service : Road transport provides complete service by loading the goods at consignor’s place and unloading them at the consignee’s place. There is also no need to wait for fall load shipment.
2. Feeder Service: Motor vehicles carry goods to terminal points e.g., air ports, railway station, sea ports. They are also used for carrying goods to outlying villages which are not connected by airways or railways.

Section – B (40 Marks)
(Attempt any four questions from this section)

Question 5.
(a) Differentiate between Shareholders and Creditors as Stakeholders of a commercial organisation. (5)
(b) Distinguish between oral communication and written communication. (5)
Answer:
(a)

Shareholders	Creditors
1. Take part in policy decisions.	1. Do not take part in policy decisions.
2. Receives share in the profits as dividend.	2. Receives only interest on their loan.
3. They are internal stake-holders.	3. They are external stake-holders.
4. They share the risk of loss.	4. They do not or are share less risk of loss.
5. They invest capital in the form of share capital in the company.	5. They only give loan to the company for a specific period of time.

(b)

Oral Communication	Written Communication
1. It is a transmission of message through spoken words.	1. It is a transmission of message through written words.
2. It is appropriate during emergent situations as it takes less time in transmitting.	2. It is inappropriate for urgent messages as it takes more time for transmission.
3. It is economical as no use of stationery is there.	3. Usage of stationery makes it costlier.
4. Use of body language facial expressions makes it more impressive.	4. Use of body language is not possible.
5. It is more flexible as changes can be made anytime and immediate feedback is possible.	5. To make changes it takes time which makes it less flexible and immediate feedback is not possible.

Question 6.
(a) How can environment values and ethics be protected? Give reasons to support your answer. (5)
(b) Explain the different sources of Internal Recruitment. (5)
Answer :
(a) Moral principles guiding environmental affairs are called environmental values or ethics. It is concerned with our duty towards our planet.

Environmental ethics and values can be developed in children by parents, teachers and social activities.

1. Awareness and education about the importance of ecology and its conservation should be taught to the students.
2. Values are developed more through example and influence than through classroom teaching. The biographies of great men and women can inspire students to become value oriented.
3. Short stories, film shows and other audio-visual material for students and teachers are also useful.
4. Suitable training programmes for teachers and parents can be held to enable them to provide value education to young men and women.
5. All school teachers must be considered as teachers of value education. All subjects must be used to inculcate right values in students.

(b) Internal Sources of Recruitment:

1. Promotion : This means upgrading an employee to a position of greater responsibility and more salary on the basis of employee’s seniority, merit, job knowledge and career record.
2. Transfer : This involves shifting of an employee from one job or branch to another without changing the profile and salary. It is used to fill the vacancy at the place to which the employee is transferred.
3. The employment : This refers to employing the employees who served the organisation in the past but have retired or have quit voluntarily.
4. Apprentices : Persons working as apprentices in the company may also be hired whenever a vacancy exists.
5. The existing employees can recommend their relatives or friends about the existing vacancy.

Question 7.
(a) Explain the Experimentation Method of Marketing Research. (5)
(b) ‘Budgets are very useful in Management’. Justify. (5)
Answer :
(a) Experimentation Method of Marketing Research: Under this method consumer’s behaviour, their characteristics, facts on market condition, various forces operating in the market and market trends is analysed. Under this experimentation method, a control market is established in which all forces except those being tested are kept under check and reactions are recorded under controlled conditions to test a theory. It is based on an assumption that small scale experiment will furnish valuable information about a large scale marketing programme.

(b) Importance of Budgets in management: Budgets are prepared on the basis of forecasts, so it gives a sound foundation to the management to think about future. It is based on the objectives to be achieved and a detailed plan of future action which makes the daily operation of a firm easy and smooth. Budgets bring efficiency and economy in the working of a business firm, by making optimum use of the available resources. It promotes the sense of responsibility among the managers, as everybody has a fixed plan of future action to be accomplished. Budgeting inculcates the team spirit which leads to uniformity of policies and united action. It is an important tool of management control, as the output can always be compared to the standards.

Question 8.
(a) Distinguish between the Principle of Indemnity and the Principle of Insurable Interest. (5)
(b) Explain the role of Commercial Banks in the Economic Development of a country. (5)
Answer:
(a)

Principle of Indemnity	Principle of Insurable Interest
The word indemnity means security against loss. It implies a promise to compensate in case of a loss, except life insurance. The-insured will be compensated only upto the amount of loss suffered by him. The insured party cannot make a profit out of this insurance contract.	Every insured person must have a monetary interest, without which no insurance contract is valid legally. A person is said to have an insurable interest in the subject matter insured, if he is benefitted by its existence and suffers a loss by its destruction.

(b)
Role of Commercial Banks in the Economic Development of a Country : Banks mobilise small savings of the public and channelise those savings into productive purpose. This increases the flow of money in any economy, which is the life good of its growth. The role of commercial banks in economic development rests chiefly on their role as financial intermediaries. In this capacity, commercial banks help drive the flow of investment through out the market place through several forms of lending.

Commencal banks can be subdivided into:

(a) Public Sector banks : Public sector banks are managed and controlled by government as the major shareholding in them is of the government. These banks make policies by keeping in view the welfare of people e.g., State Bank of India, Punjab National Bank, Corporation Bank.
(b) Private sector banks : There are managed and controlled by private individuals as a majority of shareholders are from private concern. These work on profit basis. HDFC Bank, ICICI Bank.

It helps an individual to start his business by providing capital and necessary information and then helps in running the business and expanding it by supplying credit as and when required. The aggregate effect of business activity generates employment around the country and promotes self dependency or financial independence. It also helps in transfer of funds from one place to another and help in the settlement of debts which in result promotes trade. Thus banks are the life blood of commerce and holds a significant position in the modern economy of any nation.

Question 9.
(a) Briefly explain any five factors a business person would consider while selecting an appropriate media to advertise his/her product. (5)
(b) What do you understand by ‘Group Insurance ‘? State any three features of Group insurance. (5)
Answer:
(a)

1. Nature of the Product : The advertisement media should be in accordance with the nature of the product i.e., consumer goods or industrial goods.
2. Target Customers: Selection of media depends upon the type of target customers to be approached. The target customers are rural, urban or illiterate, males or females, etc.
3. Duration of Advertisement : Availability of space in print media and time in audio and visual media affect the selection of advertising media.
4. Cost of Advertisement: If the cost of advertising is lower, it may be adopted by small business enterprises. Costly advertising media will be suitable for enterprises of bigger size.
5. Popularity of Media : The media should be popular among the concerned class of people for whom the product is meant.

(b) Group Insurance : It is a scheme which provides insurance to many people under one insurance policy. It is generally provided to the employees working under one employer. It is very economical for the employees, it terms of premium payable, as it is very less, due to the government support which encourages it as a strong tool of social security.

The three main features of it are as follows :

1. Insurance provides risk coverage to the employees as long as they remain in the service of the employer.
2. It is a contract between the insurance company and the employer.
3. The premium is generally paid jointly by the employee and the employer.

Question 10.
From the following Trial Balance of Shri Rai Bahadur, prepare Trading, Profit & Loss Account for the year ending 31st March, 2012 and Balance Sheet as on that date. (10)
Trial Balance as on 31,03.2012

Answer:
Trading, Profit and Loss A/c for the year ending 31st March, 2012

Solving ICSE Class 10 Commercial Applications Previous Year Question Papers ICSE Class 10 Commercial Applications Question Paper 2016 is the best way to boost your preparation for the board exams.

ICSE Class 10 Commercial Applications Question Paper 2016 Solved

Section – A (40 Marks)
(Attempt all questions from this section)

Question 1.
State a difference between each of the following:
(a) Marketing and Selling. [2]
(b) Renewable resources and Non-renewable resources. [2]
(c) Apprenticeship Training and Internship Training. [2]
(d) Direct Cost and Indirect Cost. [2]
(e) Cash credit and Overdraft. [2]
Answer:

(a)	Marketing	Selling
	Total system consisting of planning, pricing, promot­ing and distributing products.	A part of marketing involving persuasion and directing flow of products to customers.
(b)	Renewable resources	Non-renewable resources
	It can be used again and again.	It cannot be used again and again. It is used only once.
(c)	Apprenticeship Training	Internship Training
	This method is used in technical trades and crafts in which a long period is required to become proficient.	This is a joint programme of training in which business houses collaborate with technical institution.
(d)	Direct cost	Indirect cost
	Directly and wholly related to a particular unit or centre of cost.	Not directly and wholly related to a particular unit or centre of cost.
(e)	Cash Credit	Overdraft
	Persons not holding current accounts are eligible for cash credit.	Only current account holders are eligible for overdraft.

Question 2.
(a) What are convenience products ? Give two examples. [2]
(b) What is understood by the Going Concern Concept of Accounting ? [2]
(c) Mention any four causes of the Greenhouse Effect. [2]
(d) What are the advantages of ‘Account Payee ’ crossing of a cheque ? [2]
(e) What is a ‘Recurring Deposit Account’? [2]
Answer:
(a) These products are purchased frequently and with minimum efforts. They are meant for personal convenience. Examples – Newspapers and toothpastes.

(b) This concept assumes that the business will continue for an indefinite period of time. The transactions are recorded in the books of the business on the assumption that it is a continuing enterprise. In the absence of this assumption, no business will purchase fixed assets but only nice them.

This assumption is very important as no outsider will enter into any long term contract with the business. For example, no customer will purchase the product or service of a company which is going to be closed after three or five years. This assumption justifies classification of fixed assets and current assets as well as short – term and long – term liabilities.

(c) The four causes of the‘greenhouse effect’ are as follows:
(i) Carbon dioxide:
Carbon dioxide is released into the environment every time as fossil fuels are burnt for energy by factories, power plants and automobiles. The amount of carbon dioxide is increasing rapidly due to increasing number of vehicles, factories, power plants and automobiles.

(ii) Water vapour :
Atmospheric water vapour is a significant greenhouse gas. Increased water vapour and changes in atmospheric circulation could also create changes in cloud cover.

(iii) Methane :
Hydroelectric reservoirs and bacterial decomposition of flooded peat and forest biomass generate methane. Methane’s capacity to absorb heat is about 25 times more than that of carbon dioxide. Methane contributes about 12 percent of Greenhouse effect.

(iv) Ozone :
Ozone also has a role in the green house effect. Global warming potential of ozone is about 2000 times that of carbon dioxide.

(d) A crossed cheque cannot be in cash at the counter of the bank. A crossed cheque is payed into the bank account of a person. Crossing of cheque provide protection or against loss to the depositor.

(e) In this account, the account holder is required to deposit a specific amount every month. After the expiry of the specified period, the depositor gets back his money together with interest on it.

Question 3.
(a) Explain any two qualities of a good salesman.  [2]
(b) What are Open Market Operations of a Central Bank ?  [2]
(c) Why are interviews an essential part of the selection procedure ?  [2]
(d) What is ‘Indirect Labour Cost’?  [2]
(e) Mention any two features of Balance Sheet.  [2]
Answer:
(a) The two qualities of a good salesman are :

1. Sincere : A good salesman is always loyal and committed to his work. He is dependable and cpurageous. He requires a cool temperament and enthusiasm.
2. Sensitive: A successful salesman should be sensitive to the needs and expectations of customers. He is a good listener and has patience.

(b) The open market operations mean the sale and purchase of securities by the Central Bank in the open market. When the Central Bank wants to reduce the volume of credit, it sells securities in the market. Sale of securities props up cash reserves of commercial banks towards the Central Bank.

(c) Interviews are an essential part of the selection procedure because, this is the occasion when candidates come into contacts with the company’s officials. The purpose for interview is to ascertain the minimum qualification, experience, age, etc., of candidates. The candidates who are unfit for the job are rejected.

(d) Indirect labour cost means the labour which cannot be wholly and directly identified with a particular period.

(e) The two features of a Balance Sheet are :

1. It is not an account but a statement.
2. A Balance Sheet is always prepared on a particular date.

Question 4.
Justify a reason either for or against each of the following:
(a) On the job training includes practical and theoretical learning. [2]
(b) A demand draft is preferable to a cheque. [2]
(c) Central Bank is the lender of last resort. [2]
(d) Training is related to improving skills for performing a job. [2]
(e) In a competitive market, parity pricing is the appropriate strategy. [2]
Answer:
(a) On the job training includes only practical learning because the employees are working and learning, that’s why they are not able to write or understand in the board. The officials understand them when they are doing work with the machines.

(b) A demand draft is preferable to cheque because when a cheque is lost then any person who finds the cheque can withdraw the money and when a draft is lost then no more withdraw except the account holder of that draft.

(c) The Central bank acts as the bank for all commercial banks need in the country. When a commercial bank needs fund it can obtain loans and rediscounts its bills with the central bank. Therefore, central bank is called the tender of last resort.

(d) Training is related to improving skills for performing a job because training improves the skills of the employee. Without training no skills can be improved. Without training if the employee does the job in a company, then he cannot used machines properly. So he requires to do training first. So as to handle the machines properly.

(e) Parity pricing is an appropriate strategy. The reason is : It may be less troublesome and less costly than an individualistic pricing strategy.

Section – B (60 Marks)
(Attempt any FOUR Questions)

Question 5.
(a) Explain ‘Sales-Oriented Stage ’and ‘Marketing-Oriented Stage’. [5]
(b) Why is Service becoming more important than a Product ? Give five reasons. [5]
(c) Explain any five steps generally involved in the selection of employees. [5]
Answer:
(a) Sales – Oriented Stage :
The Great Depression resulted in a situation that questioned the thinking / strategy of business firms. Drastic changes in buying habits and behaviour of consumers, technological advancements in transportation and communication and growth of corporate form of organisation also changed the thinking. The focus shifted from production to selling.

How to sell became a problem and the new motto was to get rid of what you have. Producers began to realise that consumers will not buy enough unless they are approached with substantial selling and promotional efforts. The focus was on increasing sales rather than on consumer satisfaction.

Demand outstripped supply and it was still a seller’s market. Thus, the sales – oriented stages was characterised by hard selling. In the process of aggressive selling unscrupulous practise occurred. Salesmanship was the focus of marketing activities because product could not be sold without any effective sales force.

Marketing Oriented Stage : Consumer awareness forced to the producers to promote marketing. The aim of marketing should be to know and understand the customer so well that the product or service fits him or her and thus sells itself.

(b) The five reasons are :
(i) Increasing Urbanisation :
Urbanisation has been another cause of expansion of service sector in India. There has been shifting of population from rural to urban areas. Urbanisation leads to rise in demand for infrastructure services such as communications, public utilities.

(ii) Media :
Television, internet and other media have led to spurt in tourism. Modem technology has made business more comfortable. Tourism in turn has promoted all types of services such as hotel, restaurants, travel agents, amusement parks, event management etc. Expanding world trade has also had a demonstration effect.

(iii) Rise in Per Capita income :
Growing per capita income has led to demand for new and better services. Interior decoration, garden care, beauty parlours, slimming centres, health clubs etc. are examples of these services. More leisure time creates demand for recreation and entertainment services such as water parks etc.

(iv) Women workforce :
Higher percent age of women in workforce has created demand for baby sitting, household domestic helps and such other personal services.

(v) Greater Life Expectancy :
Increase in life span has led to great demand for health care and related services. Greater concern for ecology and resource scarcity requires time sharing, pollution control.

(c) The five steps generally involved in the selection of employees are:
(i) Preliminary Interview :
Preliminary Interview is the first occasion when candidates come into contact with the company’s official. The job seekers are received by the receptionist or some other official who conducts a brief interview of the candidates to fill up the application form. The purpose of preliminary interview is to ascertain the minimum qualifications, experience, age etc. of candidates. The candidates who are obviously unfit for the job are rejected.

(ii) Application Form :
The candidates who succeed in preliminary interview are asked to fill in the prescribed application form. The application form provides a written record of the name, address, age, qualifications, work experience etc. of a candidate. It reflects the handwriting and expression of the candidate and serves as the basis of interview. Therefore, application form should be designed carefully so as to secure all the relevant information about the candidates. There is no standard application form for all jobs or all firms.

(iii) Employment Tests :
Tests are becoming popular in employee selection. These tests are based on the assumption that work behaviour of a person can be predicted by sampling it. There are several types of tests and the right type of tests should be used. Tests are more useful for identifying unsuitable candidates than for selecting appropriate candidates.

(iv) Selection Interview :
An interview is a purposeful exchange of ideas and information between two or more persons. Interview serves as a means of checking the information obtained through application form and tests. It also provides an opportunity to the candidate to get information about the job and the company. Managers can judge the personality, communication skills and suitability of the candidate through face to face contact. Selection interview should be conducted in an atmosphere which is free from noise, disturbance and interruption.

(v) Medical Examination :
A physical examination of the candidates is necessary to ensure that they are physically fit for the job. Such an examination also help to protect the employer against the risk of claims for compensation from individuals who already suffer from disabilities and diseases. Medical examination should record a complete medical history, current physical capabilities and nature of disabilities.

Question 6.
(a) Explain the five consumer rights as per the Consumer Protection Act. 1986. [5]
(b) Explain any two elements of Public Relations. [5]
(c) ‘All vacancies at various levels in an organisation cannot be filled through an internal source of recruitment’. [5]
Explain any five external sources of recruitment.
Answer:
(a) The five consumer rights are :

1. Right to choose : It means the right to be assured whenever possible, of access to a variety of goods and services at competitive prices. It also includes the right to consumers of basic goods and services.
2. Right to be heard : It means consumer’s interest must receive the consideration at appropriate forums. It also includes the right to be represented various forums constituted to consider the welfare of consumers.
3. Right to seek redressal : It means right to seek redressal against unfair trade practices or unscrupulous exploitation of consumers. It also includes the right to fair settlement of the genuine grievances of consumers.
4. Right to consumer education : It means the right to acquire the knowledge and skill to be an informed consumer. Consumers must not only know but also exercise their rights. Only then real consumer protection can be achieved. Consumers are exploited mainly due to their ignorance and indifference.
5. Right to informed : It means right to be informed about the quality, quantity, purity, potency, standard and price of goods. By getting all such information, consumers can make the right choice and protect themselves from unfair trade practices.

(b) The two elements of Public Relations are :
(i) Human Relation :
Human relation means relations between human being on the basis of human dignity and respect for each other. Good human relations require that people are getting along well together with the ‘internal publics’ as well as ‘external publics’. Every person employed in an organisation is a human being. Therefore, each should be aware of the others and should show sincere interest in his official and personal progress. Employer or management can buy a person’s time and actions.
These things have to be earned through good human relation.

(ii) Empathy :
Empathy means looking at things and events from the other’s point of view. It requires that the communicator be in tune with the communicate. The former should understand the attitude of the latter. For example, a good speaker should know the emotions and sentiments of his audience. Knowing the emotions and sentiments of his audience. Put yourself in the shoes of the listener before you speak. Similarly as the writer should show consideration in the reader.

(c) The five external sources of recruitment are :
(i) Advertisements:
Advertisements in newspapers and journals are the most widely used method of attracting candidates for all types of jobs. The requirement of the job and terms and condition of employment are given in the advertisements. Candidates evaluate themselves against job requirement and send applications. Advertisements bring in a large number of applications due to wide circulation of a national newspaper. This method is convenient and economical also.

(ii) Placement Agencies:
Private employment agencies can be engaged for recruiting staff. These agencies advertise the vacancies, receive applications, conduct interviews and shortlist candidates on behalf of employers. But they charge fee for their services. These agencies have become a popular source for recruiting managerial and technical personal.

(iii) Gate hiring :
Small firms make recruitment at the factory gate. Workers gather at the factory gate. Workers gather at the factory gate after reading the notice of vacancies. The suitable candidates are selected. This method is used to fill temporary and casual vacancies.

(iv) Recommendations :
Applicants introduced by friends and relatives can be source of recruitment. When an existing employee or a business friend recommends a person, a sort of preliminary screening takes place. In some firms, candidates recommended by the trade unions are given preference.

(v) Jobbers and contractors :
It is quite common to engage contractors for the supply of labour, When workers are to be hired at a short notice and without going through the usual selection procedure, jobber and contractors maintain close links with small towns and villages. Therefore they are good sources of unskilled labour.

Question 7.
(a) Explain fixed cost with suitable example. [5]
(b) Explain variable cost and semi-variable cost with suitable examples. [5]
(c) Explain the first two stages of Product Life Cycle. [5]
Answer:
(a) Fixed cost are those costs while remain fixed in amount irrespective of changes in the volume of output during a given period of time such costs do not change which can be easily, directly and wholly related to a particular cost unit or cost centre. These consist of direct material cost, direct labour cost.

(b) Variable cost: Variable costs are those costs which vary in amount with changes in the level of output or activity. Such costs increase or decrease in such proportion in which the level of output increases or decreases. Semi-Variable Cost: Semi-variable costs are those costs which vary but not in direct proportion to changes in the volume of production. They are combination of fixed and variable costs.

(c) The first two stages of product life cycle are :
(i) Introduction stage:
After research and development the new product will be launched in the market cost incurred in launching the product will be high and sales may be low. Since the product is of a new variety. Competition is virtually absent, market is limited and prices are relatively high. This stage is also very risky because of high percentage of new product fail during this period.

(ii) Growth stage :
Sales increases and competitors enter the market. Having covered its research and development costs the product becomes profitable. In this stage, promotional focus shifts from “buy my product to buy my brand”. Strategies like heavy advertising, expanding distribution channels and keeping the price at competitive levels may be employed.

Question 8.
Write short notes on :
(a) (i) Principle of Timeliness. [5]
(ii) Money Measurement Concept.
(b) Newspapers as a media for advertising. [5]
(c) Narmada Bachao Andolan and the Chipko Movement. [5]
Answer:
(a) Write a short notes on :
(i) Principle of Timeliness :
Financial statements provide useful information on the basis of which user take important decision. Therefore, this principle states that the financial statements should be prepared quickly at the end of the accounting period. They should be made available to the users at the earliest possible time.

(ii) Money Measurement Concept :
On- the basis of this concept, only those transactions are recorded in accounts which can be expressed in terms of money. For example, the retirement of the chairman of the company cannot be recorded because it is not possible to measure the monetary effect of retirement except in terms of gratuity and other benefits payable to the chairman. Money is a common denominator.

(b) Newspapers are popular and widely used medium of advertising. Its main advantages are :

1. Due to wide coverage cost per leader is low.
2. There is continuity as the message can be repeatedly daily.
3. There is flexibility as the message can be modified frequently.
4. Regional newspapers can be used to focus on selected areas.

(c) Narmada Bachao Andolan :
This was started in 1986 under the leadership Medha Patkar. It aimed primarily to educate those directly affected about the social and environmental impact of large development projects. It began as a protest against the construction of dams in the Narmada Valley in general.

Chipko Movement: In the 1970s an organised resistance to the destruction of forests spread throughout India. It came to know Chipko Andolan. Chipko literally means hug the trees. The movement was lead by Sunder Lai Bahuguna and several other civil society leaders Ghaushyam Raturi, the Chipko poet wrote a poem. Its main aim was to save the trees.

Question 9.
Case Study
Maruti Nero, a product of the Maruti group has created a very good reputation in the automobile market. It has nearly 180 outlets and operates in nearly 100 cities. The company provides genuine spare parts and 24/7 roadside assistance with longest warranty coverage. It has collaboration with Tata Motors regarding its sale, service and spares. There are many dealers of Tata motors in Delhi and outskirts, so this has rapidly increased the sale of the car. The company normally goes for institutional advertising in most of the cases. It is indeed a reality that Maruti with minimum advertising has become a popular brand.

With reference to the above :
(a) What is Institutional advertising ? State and explain the other types of advertising. [5]
(b) What is a brand promotion ? Explain the methods used for brand promotion. [5]
(c) Suggest and explain any two suitable media to be used by the company to advertise its product. [5]
Answer:
(a) The aim of the advertising which is to build a favourable image of the organisation rather than to promote the sale of a product or service is called institutional institution. Other types of advertising are :

1. Informative Advertising : This type of advertising contains information about the product or services.
2. Persuasive Advertising: This type of advertising is designed to persuade the consumers to buy a product or service to support an idea.
3. Reminder Advertising: It attempts to remind people about the product / service or idea.
4. Product Advertising: The main objective of product – advertising is to promote the sale or reputation of a particular product.

(b) Brand Promotion means informing, reminding and persuading present and potential customers to purchase a particular brand.
The methods of brand promotion are :

1. Advertisements : Advertisement in newspapers, radio, TV and other media are regularly given to make a particular brand well-known among consumers.
2. Quality control: Brand become popular and continue to enjoy the confidence of buyers only when the quality of the brand is maintained.
3. Publicity : Publicity means any commercially significant news which has no sponsor, is non personal and is not paid for by the individuals or organisation and its products.

(c) The two suitable media to be used by the company to advertise its products are :
(i) Newspapers:
Newspapers are a popular and widely used medium of advertising. Its main advantages are : (a) Newspapers have a wide circulation. Therefore, this medium has a very wide average. (b) Due to wide coverage cost per reader is low. (c) There is continuity as the message can be repeated daily. (d) Regional newspapers can be used to focus on selected areas.

(ii) Films :
Films slides containing advertisements are shown in cinemas before the start of the feature film and during intermission. Along with the photo of the product there is a running commentary on its feature and uses. It has a wide coverage. The advertisement can be shown in selected cinema to focus on a selected region.

Question 10.
This statistic shows the global smartphone market share held by Nokia each quarter from 2007 to 2013. In the third quarter of2007, Nokia s market share was 48.7percent. By the third quarter of 2012 the company s market share had slipped to just 3.5 percent.

Nokia is a Finnish company head-quartered in Espoo, Finland. The company has a long history dating as far back as 1865 and first began developing what would later be modern mobile phone technology in the 1960s. The company has previously been a very strong competitor in the mobile phone and telecommunication market. While the company has struggled to maintain a significant share of the smartphone market, and has also recorded multiple losses in recent quarters, when it comes to feature phones, the company does maintain a relatively secure share of the market when compared to other vendors. The company also continues to perform well in the Asia-Pacific region as well as in the Middle East and Africa were they have previously recorded the greatest sales, Across the North American market however, the company has recorded very poor sales.

Previously Nokia used the operating system Symbian for its smartphones. Until 2010, Symbian was performing well in the global market but has since been overtaken by the very dominant Android system and also Apple s iOS. As of February 2011, Nokia made the announcement that they would be switching to the Microsoft Windows OS. The company was hoping to be able to make a comeback in the smartphone market with the adoption of the Windows operating system. In 2012 however, sales saw another decrease when compared to the previous 2 years. The Windows mobile operating system did not prove to be popular and market share slipped further. Even after Nokia’s high-profile acquisition by Microsoft, the market share of the brand still remains at a dismal 3 percent.

With reference to the above :
(a) Explain any five uses ofProduct Life Cycle to a business enterprise like Nokia. [5]
(b) Explain the various steps taken by Nokia after 2010 to improve the brand image. [5]
(c) What are the promotional activities that can be undertaken to increase the market share of Nokia ? [5]
Answer:
(a) Uses of Product Life Cycle to a business enterprise like Nokia.
(i) Managers are always in need of predictive tools to help them navigate a seemingly chaotic market, and the Product life cycle helps managers the ability to forecast product directions on a macro level, and plan for timely execution of relevant competitive moves.

(ii) The Product life cycle can be used as an explanatory tool in facilitating an understanding of past and future sales progression.

(iii) The Product life cycle aids in making sense of past events as part of any extrapolatory and interpretive approach to building strategy. Once a product strategy or product line strategy has been formulated, the Product life cycle can be used as part of an ongoing strategy validation process since it reflects on market trends, customer issues and technological advancement. Companies always anticipate the emergence of new competitors and therefore, must prepare in advance to battle the competition and strengthen their product’s position.

(iv) The Product life cycle is advantages in planning long¬term offensive marketing strategies, particularly when markets and economies are stable.

(v) By combining the elements of time and sales volume, the Product life cycle helps determine when reasonable to eliminate dead products.

(b) The various steps taken by Nokia after 2010 to improve the brand image.
Until 2010, Symbian was performing well in the global market but has since been overtaken by the very dominant Android system and also Apple’s iOS. As of February 2011, Nokia made the announcement that they would be switching to the Microsoft Windows OS.

The company was hoping to be able to make a comeback in the smartphone market with the adoption of the Windows operating system. In 2012 however, sales saw another decrease when compared to the previous 2 years.

(c) Promotional activities that can be undertaken to increase the market share of Nokia :
(i) Rebate:
Under it in order to clear the excess stock, products are offered at some reduced price. For example, giving a rebate by a mobile manufacturer to the tune of ? 1,000/- for a limited period of time.

(ii) Discount:
Under this method, the customers are offered products on less than the listed price. For example, giving a discount of 30% on the sale of Liberty Shoes. Similarly giving a discount of 50% + 40% by the KOUTONS.

(iii) Instant Draw and Assigned Gift :
Under this method, a customer is asked to scratch a card on the purchase of a product and the name of the product is inscribed thereupon which is immediately offered to the customer as a gift. For example, on buying a car when the card is scratched such gifts are offered – TV, Refrigerator, Computer, Mixer, Dinner Set, Wristwatch, T-shirt, Iron Press, etc.

(iv) Full Finance @ 0%:
Under this method, the product is sold and money received in installment at 0% rate of interest. The seller determines the number of installments in which the price of the product will be recovered from the customer. No interest is charged on these installments.

(v) Contests :
Some producers organise contests with a view to popularizing their products. Consumers taking part in the contest are asked to answer some very simple questions on a form and forward the same to the company. The blank form is made available to that consumer who buys the product first.

Result is declared on the basis of all the forms received by a particular date. Attractive prizes are given to the winners of the contest. Such contests can be organised in different ways.

Solving ICSE Class 10 Home Science Previous Year Question Papers ICSE Class 10 Home Science Question Paper 2016 is the best way to boost your preparation for the board exams.

ICSE Class 10 Home Science Question Paper 2016 Solved

Section – A (40 Marks)
(Attempt all questions from this section)

Question 1.
(a) Define a triad colour scheme. (2)
Answer:
Any three hues equidistant from one and other on the colour wheel are called triad colour scheme.

Example :

1. Primary colours : Red, Blue, Yellow.
2. Secondary colours : Green, Purple, Orange.
3. Intermediate colours : Blue-Green, Yellow-Orange.

(b) State any two ways of taking care of carpets. (2)
Answer:

1. Use brush for cleaning the carpet.
2. Always do brushing on one side and stroke the pile so that the dirt can be easily removed.

(c) What do you mean by a work triangle ? (2)
Answer:
Designers use the work triangle for the efficient use of kitchen. The three edges of the triangle are :

• Storage centre
• Preparation and mixing centre
• Cooking stove centre

These three major units – Fridge, sink and cooking stove should ideally in a triangular arrangement to facilitate handling by the housewife.
The work triangle among these three centre should not be less than 15 feet and more than 22 feet.

(d) Name any two sources of light in a house. (2)
Answer:
The two sources of light are :

1. Sunlight
2. Artificial lights – Flourocent tubes, LED bulbs.

(e) Name any two types of family budget. (2)
Answer:
1. Surplus Budget : These are those families whose income is more than expenditure can save extra amount of money.

2. Balanced Budget: Those families whose income and expenditure are almost the same. They hardly have any money to save.

Question 2.
(a) State any two characteristics of a cheque. (2)
Answer:
Characteristics of a cheque : Following are the characteristic of a cheque :

• A written investment: Should be written or typed. Bankers do not accept cheques written in pencil.
• Signature of the drawer: It must be signed by the drawer and his/her signature should be matched with the specimen signature.
• Order: It is an order which is given by the drawee.

(b) Why is sorting of clothes an important step in the laundering process ? (2)
Answer:
Sorting of clothes is necessary in the laundering process due to following reasons :

• To protect the cloth from damage like tearing.
• To decrease the chance that a garment is going to bleed over the other.
• To increase better and more efficient washing and drying.

(c) List any two characteristic of the children’s peer group during late childhood. (2)
Answer:

• The attitudes are developed and the values are recognized as the peer group friends do.
• This group provides an opportunity to understand the values of discipline i.e., rules and regulations and restrictional impose upon a child.

(d) Define the term “Menarche”. (2)
Answer:
Menarche is the first menstrual cycle or onset of menstruation in girls. This indication shows that the girl has reach puberty and is now capable of conceiving and bearing children.

(e) List any two uses each of calcium and iron in the adolescent diet. (2)
Answer:

1. Uses of Calcium :
   • It is used in the diet of an adolescent for the growth of skeleton and teeth.
   • It is also used for other physiological functions.
2. Uses of Iron:
   • It is essential for body tissues and blood.
   • Onset of menstrual cycle in girls also increases the requirement of iron in the body of girls.

Question 3.
(a) Define the term‘meal planning’. (2)
Answer:
Meal planning is defined as ‘the implementation of the principles of nutrition in one’s daily diet in an appetizing way’.

(b) Name any two adolescent eating disorders. (2)
Answer:
Two adolescent eating disorders are :

1. Bulimia nervosa
2. Anorexia nervosa.

(c) State any two factors affecting the safety of food at home. (2)
Answer:
Two factors which affect the safety of the food in home are :

1. Cleanliness of the kitchen : Kitchen should be properly clean and free from germs.
2. Hygienic handling of food: Food should be properly handled i.e., should be covered properly to avoid the entry of germs.

(d) Sugar is hygroscopic in nature. Explain. (2)
Answer:
When sugar is exposed to air it absorbs moisture present in the air. This explains that sugar is hygroscopic in nature.

(e) Give two precautions to be followed while drying of woollen garments. (2)
Answer:

1. Dry the woollen on a paper that already has their outline. It ensure that the clothes are not deshaped.
2. Dry the woollen garments in shade.
3. Press in towel to remove water.

Question 4.
(a) Suggest any two precautions to be taken during the blueing process. (2)
Answer:

1. Fabrics should not be dipped for a long time in the blue water otherwise patches will appear.
2. Blued fabrics should be dried in sunlight.

(b) Define the term “food adulteration”. (2)
Answer:
Food adulteration is the act of intentionally debasing the quality of food by mixing the substances which are injurious to the health or by removing the some valuable ingredients.

(c) List any two standardization marks. (2)
Answer:
The two standardization marks are FPO and Agmark.

(d) Why should eggs not be washed before storing? (2)
Answer:
Before storing, eggs should not be washed just because eggs contain pores in its shell which are usually filled with organic materials. When we wash eggs such organic materials get washed off and cause the opening of such pores this give way to the microorganisms to attack on it.

(e) Differentiate between perishable and non-perishable food? (2)
Answer:

Perishable Food	Non-Perishable Food
Foods which cannot be stored for more than 23 days under normal temperature conditions such as fish, milk and milk products, meat and many others	Foods which can be stored for longer time.
Cooked vegetables are also included in this group.	Such foods are cereals, sugar, coffee, salt constituent etc.

Section – B (60 Marks)
(Attempt any four questions from this section)

Question 5.
“Colour and light are an important part of our daily life.” In this context discuss the following:
(a) Three dimensions of colour. (5)
Answer:
(a) Three dimensions of colour : The three dimensions of colour are basically value, hue and intensity.
(i) Value: A colour’s lightness and darkness is known as value. On the colour wheel, the basic colours can be lightened to pale tints and darkened to nearly black shades. Basically, there are total nine value steps.

(ii) Hue: It is simply the colour quality that has been given a technical name for its identification.

(iii) Intensity: It refers to the brightness and dullness of a colour.

(b) Factors to be considered while choosing curtains for the home. (5)
Answer:
While choosing curtains for the home, the following factors should always be kept in mind :

• If you have small rooms, it can also give the effect of being large if curtain blend with walls.
• You should use plain curtains in those room which have more patterns. Plain curtain can also be used in those rooms which contains pictures and also have pattern in furniture.
• If there are too many windows in a room, the pattern of curtains should be less striking.
  Bold prints provide a masculine look while small patterns gives a feminine look.

(c) Choice of lighting in various rooms of the house. (5)
Answer:
Choice of light in various rooms of the house: Proper day light in the morning and other man- made i.e., artificial lights enhances the beauty and design in a house. It also create a living and healthy environment.

Choice of light in various rooms:
In bedroom: One tube light may be placed at the top of the dressing table mirror. Study table may have a separate lamp. Bathroom also needs a ceiling as well as a minor light.

In living room: In living and family rooms, use general lights for entering and watching T.V., lighting to highlight art work, plants and other items.

In kitchen: It should be well lighted, wall lights over the working places, tube lights fixed under the cabinets and over the cooking area.

Question 6.
“Management of money is an important aspect of home science”.
In this context explain the following :
(a) The procedure of opening a saving account. (5)
Answer:
Procedure of opening a saving account: If you want to open a saving account, firstly you have to go to a bank. Get a form of opening a bank account from the accountant, fill that form. This form include a specimen signature, this is very, important. Because every time when you fill a cheque or a withdrawal form to draw out money from the bank your sign will be matched before giving you money. What you need to open a bank/saving account are listed below:

• Fill the prescribed form
• Specimen signature card
• Address verification proof
• Two copies of passport size photograph
• Deposit slip
• Cash money (Min. – ₹ 500)
• Pan card

Passbook is given after a week of opening the account. This passbook contains your money transaction details. A cheque book is also given to you. You can make a cheque payment by filling the columns given and signing the cheque.

(b) A fixed deposit account and its advantages. (5)
Answer:
Fixed Deposit Account: Deposits which are made for a specified period and whose amount cannot be withdrawn before the expiry. These deposits are repayble, but only after the expiry of a fixed period such as one year, 5 year etc. Fixed deposits are also known as long-term deposits. For such long-term investment, higher rate of interest is offered. Large the time period of the deposits higher will be the rate of interest.

Importance:

• These are very flexible in nature.
• Fixed deposits offers guaranteed returns. The interest rate is also higher.

(c) Importance of budgeting. (5)
Answer:
Importance of Budgeting : Basically, budgeting is an art and science of planning income and expenditure.

• Budgeting helps one to live within one’s income.
• Budgeting allow a person to regulate his funds rather than his money.
• It also ensure that the spending of a person is not greater than his income.
• It also helps us to save money for our future.
• It also make us free from future worries related to money.
• Budgeting also helps us to see how best we can use our money to attain our goals which are very much important for us.

Question 7.
“Adolescence is a period of transition.”
In this context answer the following :
(a) Role of the endocrine glands. (5)
Answer:
Role of endocrine glands : The endocrine system is made-up of glands which regulate and secrete hormones. Endocrine glands are also known as Ductless glands because these have not special ducts.

Hormones are the chemical messenger of the body. Hormones regulate the growth, metabolism, sexual development and other functions of the body. Thyroid, Adrenals, Pituitary, Hypothalamus and Reproductive organs are the major glands of the endocrine system. Reproductive organs play important role in secreting sex hormones. Sex hormones are responsible for the sexual growth and other physical development. Pancreas is also an important part of this system because it has great role in hormone production and in digestion also.

(b) State any five factors that lead to conflict between adolescent and their parents. (5)
Answer:
1. We know that adolescence is the most challenging and also complicating time of life. Because in this time many physical, mental and other psycological changes occurs. This is the time when an adolescent think that he can take his own decision mean want to. be independent. This thing leads to a conflict between the adolescent and his parents.

2. Generally, conflict increase when the child reach the puberty level. The child want to be self independent and do not want any type of guidance from his parents.

3. The peer groups are also responsible in creating conflicts.

4. Being alone the child become quite moody which also result in a conflict.

5. Interference from the family.

(c) State measures to prevent body odour. (5)
Answer:
Measures to prevent body odour : To avoid the body odour following measure should be done :

• Wear clean and cotton undergarments to prevent excessive sweating.
• Clean the area around your private parts with anti-bacterial soap.
• Regularly take bath twicely.
• Drink plenty of water.
• You can also use the perfumes or deos. But these are the artificial method. It does not clean your body. It only supress the bad odour.
  Regular bathing is the best measure to prevent body odour.

Question 8.
(a) Discuss the need for adequate nutrition and a balanced diet for the elderly. (5)
Answer:
Adequate nutrition and a balanced diet is very much important in the old age to prevent and control hazards and bad effects of ageing. Obesity, diabetes, constipation, cardiovascular diseases are the major diseases in old ages. Hence, good nutrition is very important during old age. Special care should be taken that the diets of the elderly are nutritionally adequate and well balanced. You should know or have the knowledge that the elder people require less calories.

Few factors always be kept in mind while you are planning balanced diet for the elder people.

• Provide them liberal amounts of food products like as milk, fresh fruits, green vegetables. These kinds of food provide them vitamins and other minerals.
• Adequate consumption of calcium should be ensured to make the bones strong in old age too.
• Scientists also gave emphasis on the importance of water in the diet of the elder persons for the better functioning of kidneys.
• The diet should be soft and well cooked and it should also include those foods which need a little or no mestication. Because at old age maximum people loss their teeth. So they need soft food.
• Intake of sweets, fried, high fat foods should be reduced at minimum. Because the elder people feels difficulty to digest such kind of food.
  A proper diet, exercise and a pleasant environment are necessary for a healthy and long life of our elders.

(b) Describe any five factors affecting meal planning. (5)
Answer:
Factors affecting meal planning : Meal planning is a very complex job. Many factors that influence meal planning are there. Meal planning is mainly influenced by factors like age, sex, likes and dislikes, physical needs etc.
1. Age: Age is the main factor which broadly affect the meal planning. The composition and quality of food is affected with age. For example, babies only need mother’s milk. As the babies grow they start eating food products. Older people need less calorie food.

2. Sex: Diet change according to the sex. Men generally eat more than the women. The difference is just due to the fact that men having the higher metabolic rate than the women.

3. Likes and Dislikes : Personal likes and dislikes mainly influence food intake. While planning diet this thing should be in our mind. Carefully develop good eating habit in the children.

4. Physical needs : In a family, there are different members having different ages, so nutritional requirements of such people should also be kept in mind while planning a diet.

(c) Explain the five food groups and their nutritional contribution. (5)
Answer:
Food groups: Food group is a collection of varieties of foods which share similar nutritional properties.
In the food grouping, food items are generally classified on the basis of their nutrients.

Food Groups	Main Nutrients
1. Cereals, Grains and Products: Rice, wheat, bajra, maize, jowar, wheat flour etc.	Energy, protein, fat, vitamin B1, vitamin B2, folic acid, iron, fibre etc.
2. Pulses and Legumes: Bengal gram, Blackgram, Green gram, Lentil, cowpea, peas, rajma, soyabeans etc.	Energy, protein, fat, vitamin B1, vitamin B2, folic acid, iron, fibre, calcium etc.
3. Milk and Meat Products: Milk, curd, skimmed milk, cheese. Chickenliver, fish, eggs, meat.	Protein, fat, vitamin B2, Calcium, Vitamin A. Protein, fat vitamin B2, vitamin A, vitamin B12
4. Fats and Sugars Fats: Butter, ghee, hydrogenated oils, cooking oils, like groundnut, mustard, coconut oil. Sugars: Sugar, Jaggery	Energy, fat.
5. Fruits and Vegetables: Fruits: Mango, guava, tomato ripe, papaya, orange, sweet lime, watermelon. Vegetables: (green leafy) Amaranth, spinach, gogu, drumstick leaves, coriander leaves, mustard leaves, fenugreek leaves.	Energy. Carotenoids, vitamin C, fibre, carbohydrates etc. Fats, carotenoids, vitamin B, folic acid, calcium, iron, fibre.

Question 9.
“Laundering is a combination of cleaning and finishing.” In this context explain the following :
(a) Household method of laundering a white cotton shirt. (5)
Answer:
Following are the methods of laundering a white cotton shirt.

• Preparation: Here, you have to firstly examine the white shirt for any tears, hole, dirt particles, stain etc.
• Steeping: Overnight soak the white shirt if it is very much dirty but if it is less dirty you can soak it for 1 hour. Do not soak the coloured garments with the white ones.
• Washing: We know that cotton is a strong fibre and it become more stronger when it is wet. Cotton is mainly washed by scrubbing or rubbing method.
• Rinsing: To remove the soap and other impurities rinse two or three time in clean, running tap water.
• Starching and Blueing: Blueing is done for white cotton shirts only. Both these processes are done in a combined way to save time.
• Drying: Shirt should be dried on hangers.
• Ironing: Cotton fabric should be ironed properly.

(b) Advantages of using detergent over soaps. (5)
Answer:
Advantages of detergents over soaps :

• Detergents are cheaper than soaps.
• Detergents are efficient in hard water too.
• They are easy to rinse.
• Surface tension of detergent is low. So they have more efficiency than soaps.
• Detergents are soluble even in cold water.

(c) Storage of clothes. (5)
Answer:
Storage of clothes :

• Cotton clothes:
  1. Do not store moist clothes, they invite fungus.
  2. Put some deodorant among the stored clothing to avoid the smell, (musty)
• Silk clothes:
  1. Store dry clothing only.
  2. Avoid use of mothballs because they reduce the lustre of zari.
• Wool clothes:
  1. Store totally dry woollens.
  2. Use neem leaves, nephtha balls to prevent the damage by moths.

Question 10.
Write the short note on the following :
(a) The role of consumer education. (5)
Answer:
Role of consumer education : Consumer education develops critical awareness and other living skills. Consumer education mainly aims at making consumer aware about what, when, where, how and how much to buy. Consumer education assists the buyer in wise selection of goods to meet family requirements. It helps in the following way :

• It helps a person to develop the ability to choose and decide things intelligently.
• It motivates the consumer to demand safe, reliable and quality products at a fair price.
• It also aware the consumer about his rights and responsibilities.
• It also suggests the various ways which a consumer can choose when he face a problem.

(b) State any five problems faced by consumers. (5)
Answer:
Problems faced by consumers: A consumer faces many problems ranging from variation in price to malpractices followed by the shopkeepers.
1. Variation in price : You may also find the price of some product vary from shop to shop. This always confuse a consumer whether he paid a right price for the product or the shopkeeper cheat him. At some shops the price of some commodities are higher than the others. It can be due to the following :

• Shopkeeper is making high profit.
• Consumers can pay high prices for those goods which are not easily available.

2. Poor quality: One is often faced with such kind of problem of identifying a genuine product among the duplicate products.

3. Adulteration : It indicates addition or removal of any substance from the original products in order to lower the quality of food stuff.

4. Misleading advertisement: It is a forceful tool of persuading and influencing the judgement of the consumer. In advertisement, the product is so attractively advertised that the consumer gets confused to purchase that.

5. Non-availability of goods : Sometimes the shopkeeper hoard commodity (ies) and create artificial shortage of that product. This results that the consumers have to pay more for that necessary things like rice, wheat, pulses. The consumers face a lot of difficulty and inconvenience.

(c) Kesari dal (Lathyrus sativus) and its ill effects. (5)
Answer:
Kesari Dal (Lathyrus sativus): This is a staple food which is often mixed with the other pulses. This is found in Madhya Pradesh, Uttar Pradesh, Bengal and Bihar.

Ill effects: If any person consume high or excessive amount of Kesari Dal can suffer with a form of paralysis. It mainly occurs in boys and men in the age of 5-45 years. The disease starts with stiffness of the knee joints and legs with pain around the knee and ankle joints within 10 to 30 days. The person suffer from this disease becomes crippled as his knees gets bent and stiff.

Solving ICSE Class 10 Home Science Previous Year Question Papers ICSE Class 10 Home Science Question Paper 2017 is the best way to boost your preparation for the board exams.

ICSE Class 10 Home Science Question Paper 2017 Solved

[Section – A (40 Marks)]
(Attempt all questions from this section)

Question 1.
(a) Define a complementary colour scheme. [2]
Answer:
A complementary colour scheme uses any two colours that are opposite to each other on the colour wheel.

(b) Name any two neutral colours. [2]
Answer:
Neutral colours:

• Black
• White
• Grey
• Brown
• Tan
• Beige

(c) State any two advantages of a well-planned kitchen. [2]
Answer:
Advantages of a well-planned kitchen:

• Carrying out activities smoothly without obstruction.
• Efficient use of time and energy.
• Comfortable working.
• Minimum unpleasant disturbances.

(d) What is the purpose of general lighting in a home? [2]
Answer:
General lighting provides:

• an area with overall illumination.
• enables one to see and walk safely.

(e) Classify family income into two categories. [2]
Answer:
Family income from different sources is classified under:

• Assured income
• Possible income

Question 2.
(a) State two advantages of saving money in a bank. [2]
Answer:
The advantages of saving money in a bank are:

1. Safety
2. Earning interest from the bank.

(b) State two uses of an ATM machine. [2]
Answer:
Uses of ATM:

• Cash withdrawals
• Check account balances

(c) Define ‘language development’. [2]
Answer:
Language development can be defined as the ability to communicate through the use of meaningful words and sentences.

(d) Write about any two common emotional patterns seen during childhood. [2]
Answer:
Common emotional:

• Pleasant emotions e.g., affection, curiosity, joy, delight, happiness, pleasure, etc.
• Unpleasant emotions eg., fear, anger, jealousy, worry, etc.

(e) Define the term investment. [2]
Answer:
Investment is a process of putting surplus funds in some productive activity with the expectation of reasonable return with the assurity of capital remaining intact.

Question 3.
(a) State any two characteristics of a balanced diet. [2]
Answer:
Characteristics of a balanced diet:

• Helps in controlling body weight, heart rate and blood pressure (BP).
• Increases exercise capacity and muscle performance.
• Maintains blood sugar, lowers harmful and increases beneficial cholesterol.
• Produces mental and physical relaxation.
• Caters to the calorie requirement of all age groups.
• Caters to the individual requirement of each family member.

(b) Mention the importance of ‘dietary fiber’ for the elderly. [2]
Answer:
Importance of dietary fiber for the elderly:
Has a beneficial effect in:

• Constipation
• Diabetes
• Cardiovascular diseases

(c) What are the changes in food due to freezing? [2]
Answer:
Changes in food due to freezing:

• Formation of ice crystals within the food.
• Freezing destroys the texture of some foods.
• On thawing, vegetables become limp and soggy.

(d) Name any two common skin problems seen during adolescence. [2]
Answer:
Common skin troubles:

• Dryness
• Greasiness
• Blackheads
• Acne
• Superfluous hair

(e) State any two common causes of family conflict during adolescence. [2]
Answer:
Causes of family conflict:

• Interference from family members.
• Want of independence.
• Ideas of peer groups which clash with that of parents.
• Adolescence moody behaviour leads to conflicts.
• Hypercritical attitude of the family.

Question 4.
(a) What are the uses of optical brighteners in laundry? [2]
Answer:
These are used to counteract the effect of yellowness, making white fabrics appear whiter and brighter than before.

(b) Mention any two reasons for boiling cotton clothes during laundry. [2]
Answer:
Reasons for boiling clothes:

• To disinfect.
• To whiten and freshen.

(c) State any two unfair practices carried out by traders in the market. [2]
Answer:
Unfair practices in the market:

• Use of brand names, labels and packing similar to good quality products.
• Offers to attract consumers may not be genuine.
• Gifts are offered after the price of the product on sale has been increased. (Any Two)

(d) Write about any two important consumer rights. [2]
Answer:
Consumer rights:

• Right to safety
• Right to be informed
• Right to choose
• Right to be heard
• Right to seek redressal
• Right to consumer education

(e) Mention the adulterants used to contaminate the following: [2]
(i) Mustard oil
(ii) Bengal gram
Answer:
Adulterants in:
(i) Mustard oil – Argemone oil
(ii) Bengal gram – Kesari Dal or lathyrus

[Section – B (60 Marks)]
(Attempt any four questions from this section)

Question 5.
Interior decoration expresses the personality of the home maker.
In this context discuss the following:
(a) Five work centres of a kitchen. [5]
Answer:
Five work centres of a kitchen:

1. Preparation centre – for all preparations made before cooking. The centre facilitates chopping and mixing.
2. Cooking centre – where gas is placed. Requirements – heat resistant counters, wall cabinets to store spices, small utensils and base cabinets for heavy utensils.
3. Washing centre or sink centre – for clearing and for dish washing. Equipment and materials for cleaning should be stored here.
4. Serving centre – can be a continuation or a separate table may be provided in the kitchen.
5. Storage centre – for keeping groceries, cooking utensils and cleaning materials.

(b) Causes of glare from a light source. [5]
Answer:
Causes of glare:

• Brightness of source – causes annoyance and blinding effect.
• Total volume of light — more than desired light in the direction of eyes causes discomfort.
• Location of the field of view – a source of light located too close to the eye causes glare.
• Contrast with background – light source against a dark background of wall is tiring to eyes.
• Time exposure – Eye fatigue is caused if the light is within the field of view for a longer time.

(c) Factors affecting the selection of carpets for a room. [5]
Answer:
Selection of carpets for a room:

• Size of the carpet – strip or broad loom.
• Colour according to furnishing used – large room dark and in small room, the colour should blend with the wall to show space.
• Plain or patterned depending on upholstery.
• Care and maintenance needed.
• Durability to last long.
• Stains are shown on light shades.
• Cost depending on budget.

Question 6.
“Budgeting is the first step in money management.”
In this context explain the following:
(a) Factors affecting family budget. [5]
Answer:
Factors affecting family budget:

• Composition of the family – the number of members along with earning members affects the family budget.
• Family life cycle – at which stage is the family – beginning, expanding or contracting family.
• Economic status – expenditure varies with the standard of living that the family has to maintain.
• Religious ceremonies and celebrations – the amount of entertainment done by the family and observing traditional values, bring forth a number of ceremonies to be performed.
• Place of stay – if the family lives in a small town, rates are comparatively low, overall expenses on necessities are less and so the family can spend on luxuries. The distance of place of work from home also affects the family budget.

(b) Reasons for saving. [5]
Answer:
Reasons for saving:

• Reduces economic insecurity especially in old age after retirement.
• During illness or physical inability.
• During emergency – Loss of job / accident.
• Useful for children’s education, marriage.
• Useful in making big purchases like house, car, etc.

(c) Precautions while writing a cheque. [5]
Answer:
Precautions while, writing a cheque:

• Date correct date should be written.
• Payee’s name must be correctly written. The word Self is written if the cheque is drawn for himself.
• Amount should be written carefully both in words and figures and must be suffixed with the word ‘only’.
• Drawers signature should be complete, genuine and in ink. It must tally with the specimen signature in the bank otherwise the cheque is dishonored.
• Alterations can be done in date, amount or the name of the payee and must be confirmed by the drawers signature. The bank does not honor a cheque that has alterations without a drawer’s sign.

Question 7.
(a) What are the factors affecting the physical development of a child? [5]
Answer:
Factors affecting physical development of a child:

• Healthy and nutritive food, comfortable clothing and a home that offers safety and protection.
• Protection provided by adult members.
• Healthy environment and habits are important.
• Play and exercise also are important.
• Immunization schedule should be followed.

(b) State the changes seen in social behaviour of a child between the ages of 5-12 years. [5]
Answer:
Social development in 5-12 years:

• School teaches the child values, goals and approved ways of behaviour.
• Learns new social rules.
• Feedback from classmates helps a child to change his behaviour.
• Learns to make social contacts and get along with children of his own age.
• Learns to cooperate in a group.

(c) What are the effects of sex hormones during puberty? [5]
Answer:
Effects of sex hormone during puberty:

• Development of hair in pubic region and armpits.
• In boys, development of facial hair, cracking and deepening of voice.
• In girls, development of breasts and thickening of hips.

Question 8.
(a) Discuss the method of storage of semi-perishable foods. [5]
Answer:
Storage of semi-perishable food:

• Suji and Dalia-Dry roast before storing in dry air tight containers to retain flavour for a longer time.
• Spices should be stored in dry air tight containers to retain their flavor.
• Potatoes, onion, ginger and garlic may be stored in cool, dry and dark places to keep sprouting to a minimum.
• Ghee, oil and butter should be stored in air tight containers because air and moisture make them rancid.
• Paneer – must be kept in refrigerator to keep it for a longer time.

(b) Briefly describe any five principles of meal planning. [5]
Answer:
Principles of meal planning:

• Use of five food groups in diet plan.
• Knowledge of nutritional needs of family members.
• Knowledge of nutritive value of foods, nutrients and sources.
• Use of available resources – skill, knowledge, ability.
• Budget of the family allotted for food.
• Knowledge of seasonal foods.
• Equipment available for cooking.
• Storage facilities available.
• Likes and dislikes of the family.

(c) Explain the procedure for preserving foods by the use of chemical preservatives. [5]
Answer:
Use of chemical preservatives:
1. Two important chemical preservatives permitted in different parts of world are Benzoic acid and Sulphur dioxide. The salt of benzoic acid is called sodium benzoate which is used as preservative. Benzoic acid is more effective against yeasts than moulds.

2. Potassium metabisulphite is used as a salt of Sulphur dioxide. Potassium metabisulphite is a crystalline salt and is fairly stable in natural and alkaline medium. Fruits and vegetables which have red colour should be preserved by using sodium benzoate and potassium metabisulphite as a red colour of fruits or vegetable gets discoloured by the use of Sulphur dioxide.

3. Use of chemicals during preservation should be controlled.

Question 9.
Explain the:
(a) steps in laundering a polyester garment. [5]
Answer:
Steps in laundering polyester garment:

• Preparation – examine clothes for tears and stains and treat them accordingly.
• Steeping – they need not be soaked if not very dirty. Hot water gives them too many wrinkles.
• Washing – can be washed with any soap or detergent. Methods of friction can be used for cleaning and removing dirt.
• Rinsing – should be done with clear tap water. They should not be wrung to remove extra water otherwise wrinkles appear on synthetic fabrics.
• Drying- synthetic fabric should be allowed to drip dry. They dry quickly and are resistant to fading.
• Ironing – Require little or no ironing because synthetic fabrics are wrinkle resistant.

(b) importance of ironing as a method of restoring freshness to a garment. [5]
Answer:
Ironing is an important method of finishing need at home:

• Ironing – cloth is spread on a flat, hard and padded surface.
• Hot iron is moved back and forth along the length of the fabric with pressure.
• Different fabric have different heat resistance. Synthetic clothes require very little heat to crease out their wrinkles.
• Cotton and linen are ironed at high temperatures.
• The most important precaution is the maintaining of appropriate temperature for ironing. If higher temperature than required is used the clothes may scorch or bum and low temperature will not iron out creases properly.

(c) properties of a good laundry soap. [5]
Answer:
Properties of a good laundry soap:

• Colour of the soap should be clear and pale. Dark coloured soaps contain impurities.
• Soap should be hard to touch. Soft soaps contain excess water.
• On storage, appearance of white crystals indicate excess alkali which is harmful to clothes and to hands.
• When broken it should appear granular.

Question 10.
(a) What are the advantages of consumer education? [5]
Answer:
Advantages of consumer education:

• To develop the ability to decide and choose things intelligently.
• To always demand safe, reliable and good quality products at a reasonable price.
• To make consumer alert, well informed and vigilant against corrupt practices in the market.
• To take suitable action when faced with a problem.

(b) Define consumer aids. How does consumer aid help in wise buying? [5]
Answer:
Consumer aids:
1. Definition – Consumer aids are those tools that guide the consumers in selecting and buying a product. The following consumer aids help in wise buying

2. Standardization marks – mark given to a product which meets certain standards with respect to the quality of the product, material used, method of manufacture, labelling, packaging, sale and performance.

3. Advertisements- inform the consumers about the availability, use and special features of a product.

4. Packaging is the container or wrapper in which a product is kept for marketing and it protects the product from damage and adulteration.

5. Labels attached to the product give information about the product manufacturers name, ingredients, date of manufacture, expiry, weight, MRP, directions for use etc.

(c) Describe the ill effects of toxic colours used in foods. [5]
Answer:
III effects of toxic coloring:

• They contaminate food with their poisonous ingredients.
• They are carcinogenic.
• Intake produces abnormalities of bone, eyes, skins, lungs.
• Mental retardation.
• Accumulation of lead in the body.

Solving ICSE Class 10 Commercial Applications Previous Year Question Papers ICSE Class 10 Commercial Applications Question Paper 2015 is the best way to boost your preparation for the board exams.

ICSE Class 10 Commercial Applications Question Paper 2015 Solved

Section – A (40 Marks)
{Attempt ALL Questions)

Question 1.
State the difference between each of the following:
(a) Commodity market and Capital market.   [2]
(b) Skimming pricing and Penetrating pricing.   [2]
(c) Current Deposit Account and Saving Deposit Account.   [2]
(d) Training and Education.   [2]
(e) Money costs and Real costs.   [2]
Answer:

(a)	Commodity Market	Capital Market
	1. This is an organised market where commodities . are bought and sold according to prescribed rules and regulations. 2.   For example : Cotton	1. This is a specialised market for providing long-term finance to business enterprise. 2. It comprises specialised financial institutions, stock exchanges, investment trusts, insurance companies.
(b)	Skimming Pricing	Penetrating Pricing
	1.  Skimming pricing involves setting the price of a product at a high level. 2. The aim is to ‘sell to classes’ who don’t care how much they pay for a novel product. 3. This strategy is appropriate in case of a highly distinctive product which is aggressively promoted in the early stages of its life cycle.	1. Penetrating pricing involves setting the price at a low level. 2. The manufacturer seeks to sell to the masses. 3. Many firms use this strategy while launching fast moving consumer products. This strategy results in high sales volume in the early stage.
(c)	Current Deposit Account	Saving Deposit Account
	1. The current account is basically a transactional account which is preferred by business people. 2. The basic objective is to provide flexible payment methods to the business people and entities.	1. The savings banks accounts are preferred by individuals and provide liquidity for private and small business sometimes. 2. The basic objective is to enable the customer save his/ her liquid assets and also to earn money on that saving.
(d)	Training	Education
	1.  Training involves increasing knowledge and skills for a specific job. 2. Training is often given on the job. 3. Training is practical and job-oriented. 4. The burden of training falls mainly on the employer.	1. Education involves improving general knowledge and intelligence. 2.Education is generally imparted in schools and colleges. 3. Education is theoretical. 4. The burden of education falls mainly on the government and the student.
(e)	Money Costs	Real Costs
	1.It means the amount of money, which a producer spends on producing a particular commodity. 2.  It is the money expenditure incurred on buying or hiring inputs for producing a given amount of commodity.	1. It means the sacrifice, discomfort and pain involved in supplying the factors of production. 2. Money paid for hiring labour is money cost but the sacrifice and efforts made by the workers involved is real cost.

Question 2.
(a) What is meant by ‘Variable Cost’? [2]
(b) What is Tidal energy? [2]
(c) Mention any four main reasons for the rapid growth of public relations. [2]
(d) What is a ‘Balance Sheet ’ ? [2]
(e) State two essentials of a good advertisement. [2]
Answer:
(a) Meaning of Variable Cost
Variable costs are those costs which vary in amount with changes in the level of output or activity. Such costs increase and decrease in the same proportion in which the level of output increases or decreases. Variable costs vary in total amount but remain constant per unit of production. The behaviour of variable cost is shown in the following graph:

Production (in thousand Units) variable costs Thus, there is a linear relationship between volume of production and total variable costs.

(b) Meaning of Tidal Energy
Tides are caused by the gravitational force of the sun and the moon. The tides have a tremendous amount of mechanical energy. This energy can be used to generate electricity. Thus, tidal energy is derived from the tides of the oceans.

In India, three sites have been selected for generating tidal eriergy – Gulf of Kutch, Gulf of Cambay in Gujarat, Sundarbans, along the east-west of West Bengal. Tidal power is renewable, free of cost and can be a source of continuous supply of energy.

(c) The Main Reasons for the Rapid Growth of Public Relations are as follows :
(i) Communication Gap:
The need for communication between organisations and their public is being increasingly recognised. Public relations function is required to bridge this communication gap.

(ii) Population Growth:
A significant factor contributing to the development of public relations has been the increase in population and the resulting expansion of business, social and political organisations. Public relations function developed to explain organisational policies and actions to public and bring about better understanding.

(iii) Recognition of Social Responsibility :
Public relations has grown in importance as corporations recognise that they have a social responsibility to serve the public. Public services of corporations include financial contributions to community, social welfare, health and youth organisations, participation by employees in local government and education, and sponsorship of cultural education.

(iv) Big Government :
Growing government activity, legislation, taxes and criticism of business by politicians have all contributed to the expansion of public relations into the field of public affairs and relations with local, state and national governments, (v) Development of Communication Media : Tremendous growth in video and cable systems has enabled rapid and widespread transmission of information. Unprecedented progress is being made in the media of communication.

(d) Meaning of ‘Balance Sheet’
Balance Sheet is a statement that shows the assets, liabilities and capital of an organisation on a particular date. It depicts the financial position of the organisation on a specified date. Balance sheet is used to judge the financial position of the firm at the end of the year and it enables the firm to meet its statutory obligations. Prospective investors can use the balance sheet for arriving at their investment decisions.

(e) A good advertisement should contain the following essentials:
1. Attention Value :
The first requirement of a good advertisement is that it must be able to attract the attention of those to whom it is directed. Most of the people are busy and pay a cursory attention to advertisements. Unless the advertisement draws their attention, it will go waste. The following techniques may be used to make the advertisement attractive :
(a) By using catchy but short headlines.
(b) By using pictures or drawings of the product being advertised.
(c) By inserting reply coupons for gifts or free literature.

2. Memorising Value :
The design and layout of the copy should be such that it has a lasting impression on the minds of the people. Repeated use of brand names and trademarks helps to make the advertisement memorable. A picture depicting the use of the product for a specific need is useful, e.g., a housewife nursing a burnt finger with Bumol. Association of the product with a symbol or sketch also helps to create a long, term impact on mind. For instance, the smiling baby has become associated with Murphy radios.

Question 3.
(a) What is Receipts and Payments Account ? [2]
(b) What is understood by the ‘Principle of Consistency ’ ? [2]
(c) What is meant by ‘Discounting of a Bill ofExchange ’ ? [2]
(d) What are the components of Marketing mix? [2]
(e) What is meant by In-house market? [2]
Answer:
(a) Meaning of Receipts and Payments Account
Receipts and Payments account is a summary of cash transactions. It is prepared by a non-trading organisation at the end of every accounting year. All cash receipts and cash payments are recorded irrespective of whether they belong to the current year, previous year or future year. Receipts and Payments Account is prepared at the end of the year from the Cash Receipts Journal and Cash Payments Journal. All the receipts and payments during an accounting period are included in it under suitable headings.

For example : Subscriptions received from members on different dates appear in the cash book but the total subscriptions received during the year appear in the Receipts and Payments Account.

(b) ‘Principle of Consistency’
The consistency principle requires accountants to be consistent from one accounting period to another in applying accounting principles, methods, practices, and procedures. In other words, the readers of a company’s financial statements can presume that the same rules and measurements were followed in all of the years being reported. If a change is made to a more preferred accounting method, Jhe effects of the change must be clearly disclosed.

The Financial Accounting Standards Board refers to consistency as one of the characteristics or qualities that makes accounting information useful.

(c) ‘Discounting of a Bill of Exchange’
If the drawer of the bill does not want to wait till the due date of the bill and is in need of money, he may sell his bill to a bank at a certain rate of discount. The bill will be endorsed by the drawer with a signed and dated order to pay the bank. The bank will become the holder and the owner of the bill. After getting the bill, the bank will pay cash to the drawer equal to the face value less interest or discount at an agreed rate for the number of days it has to run. This process is known as discounting of a bill of exchange.

(d) Meaning of ‘Marketing Mix’
Marketing mix refers to a combination of four P’s viz, product, price, promotion and place. These are closely inter-related because decisions in one area influence those in others. These constitute the core of a company’s marketing system.
Following are the components of Marketing mix :

1. Product Mix : It involves decisions regarding the size, design, colour, quality and other features of the product.
2. Price Mix : It involves decisions regarding the price of the product, discount, credit and terms of payment.
3. Promotion Mix : It includes advertising, personal selling and sales promotion. It helps in increasing demand for a product.
4. Place Mix : It refers to the combination of all decisions relating to make products available to consumers.

(e) Meaning of In-House Market
Door-to-door sales persons visit the homes of consumers and offer products to them. Before the visit, initial contact may be created through telephone or mailed in coupon. This is an effective method and offers great convenience to the customers.

In India, Eureka Forbes is selling its water filters and vaccum cleaners through this method. This is however, a time-consuming and costly method. In some cases, a host invites friends to a party. The salesperson demonstrates the products at the market and takes orders from the invitees. This offers a friendly and social environment for shopping.

Question 4.
Justify a reason either for or against each of the following:
(a) Services are not homogeneous. [2]
(b) Firms live forever (explain with reference.to the concept of accounting). [2]
(c) Public relations is a propaganda. [2]
(d) The cost of sugarcane is an avoidable cost. [2]
(e) A cheque is an inconvenient method of making payments. [2]
Answer:
(a) For
Because one may not get the same service quality each time.

(b) For
Accounts of a firm are prepared on the assumption that the firm will continue to exist forever, it is known as the ‘going concern concept’ of accounting. It is on the basis, this concept that the outstanding and prepaid expenses are recorded in the final accounts.

(c) Against

1. It involves analysing and understanding the attitudes and feelings of different stakeholders.
2. It requires continuous efforts to create and sustain a good public image of the organisation.

(d) For
The cost of sugarcane can be avoided by chasing down the sugar factory for one year.

(e) Against
A cheque is a very convenient method of making payment. There is no need of counting and checking notes, when payment is made by a cheque.

Section – B (60 Marks)
(Attempt any FOUR Questions)

Question 5.
(a) Distinguish between a Product and a Service citing suitable examples. [5]
(b) Describe the various steps involved in Personal selling. [5]
(c) Explain the main principles of Accounting. [5]
Answer:
(a)

	Basis of Distinction	Product	Service
1.	Tangibility	Fully tangible (a) Can be felt and touched. (b) Can be fully standardised.	Intangible, may have physical evidence. (a) Cannot be touched. (b) Cannot be standardised.
2.	Inseparability of buyer and seller	Fully separable, remote transactions are possible.	Not separable, remote transactions not possible.
3.	Quality	Can be measured and controlled	Difficult to control and measure
4.	Inventory	Can be stored	Cannot be stored.
5.	Sensitivity to time	Low sensitivity, e.g., a soap can be bought in advance of need.	Highly sensitive, e.g., doctor’s services are needed when there is a patient.
6.	Risk	Product can be replaced.	Service delivered cannot be replaced.
7.	Customisation	Increases costs and restricts sales	Increases customer delight.
8.	Market relationship	Product and brand are the focus of transaction.	A very important link.
9.	Brand	Main strategy in product marketing.	People are equally important.
10.	Perishability	Usually durable	Usually perishable
11.	Ownership	Transferable	Not transferable

(b) Meaning of Personal Selling
Personal selling or salesmanship is the process of assisting and persuading a prospective buyer to buy a product or service in a face-to-face situation. It is the act of persuading people to purchase goods and services which will provide them lasting satisfaction. It involves winning the buyer’s confidence and creating a regular and permanent customer.

Steps in Personal Selling Process :
The process of personal selling consists of the following steps :
1. Preparation :
First of all a well-trained and motivated sales force is developed. Sales- persons must have knowledge of the firm and its products and services, competitors and their products and services, customers and selling techniques. They must be fully aware of the quality, uses, prices, etc., of the goods to be sold.

2. Prospecting :
Prospecting means locating and identifying the potential buyers. A list of prospective customers can be prepared with the help of dealers, salespersons, telephone and trade directories, etc. Information about the age, income, education, family background, tastes, preferences, etc., of prospective buyers should be collected. Collection of such information is called pre-approach.

3. Approach :
In this step, the salesperson makes face-to-face contact with the prospective buyer. The salesperson should introduce himself, greet the customer and start conversation with him/her so as to create a good first impression.

4. Presentation :
Now the salesperson displays and describes the product to be sold. He should tactfully demonstrate the product and explain its quality, utility, performance, etc. He should explain how the product meets the needs of the customer and arouses his interest.

5. Convincing :
At this stage, the salesperson handles the objections raised by the customer. Objections should be considered as sales opportunities. Instead of arguing or losing temper, the salesperson should understand the causes of objections and should try to convince the customer.

(c) Accounting is the language of business. In order to make this language precise, accounting authorities have developed certain basic rules. These man-made rules of accounting are called Generally Accepted Accounting Principles. These principles are accepted and used by accountants all over the world so that financial statements become comparable and useful to the users.

The basic principles of accounting are given below :
1. The Business Entity Concept :
According to this concept, a business firm is treated as a unit separate and distinct from its owners. A completely separate set of books is kept for the firm and business transactions are recorded from the firm’s point of view. The capital provided by the owner is treated as a liability of the firm. The concept of separate entity is necessary for ascertaining the true net profits and financial position of a business firm.

In the absence of this concept, the affairs of the firm will be all mixed up with the private affairs of the proprietor and the true picture of the firm will not be available. The assumption of business entity is applicable to all types of business – sole proprietorship, partnership and company.

For example, if A owns property worth ₹ 20 lakhs, out of which he invests ₹ 10 lakhs in his business then ₹ 10 lakhs will be his private property and ₹ 10 lakhs will be business property.

2. The Going Concern Concept:
It is assumed that the business will continue to exist for a long time in the future. Transactions are recorded on the assumption that the business will exist for an indefinite period of time. It is on this assumption that a distinction is made between capital expenditure and revenue expenditure. A firm is said to be a going concern when there is neither the intention nor the necessity to wind up its affairs.

In the absence of this assumption no outside parties would enter long-term contracts with the firm for supplying funds and goods. The going concern concept also implies that the existing liabilities will be paid at maturity. Unsold stock of goods are taken to the next year.

3. Money Measurement Concept :
On the basis of this concept, only those transactions are recorded in accounts which can be expressed in terms of money. For example, the retirement of the chairman of the company cannot be recorded because it is not possible to measure the monetary effect of retirement except in terms of gratuity and other benefits payable to the chairman.

Money is a common denominator. Thus, money measurement concept helps to make accounting records homogeneous, relevant, simple and understandable.

4. Accounting Period Concept :
It is due to this concept that financial statements are prepared at regular intervals, generally one year. This period is called accounting period. The net profit/net loss of business is ascertained separately for each accounting period. Similarly, the financial position of business is ascertained on the last day of an accounting period. Under tax laws, the accounting period starts from 1st April and ends on 31 st March next year.

The entire life of firm is divided into time intervals for the purpose of financial reporting. In accounting, such a time interval is called accounting period. The accounting period is usually one year. Accounting statements are prepared at the end of each year so that the interested parties are able to judge the progress of business. This involves a process of estimation.

5. The Dual Aspect Principle:
This principle suggests that every debit has a corresponding and equal credit. There must be a giver of benefit and also a receiver of the same. This principle has given rise to the double entry system. It is due to this principle that both the sides of the Balance Sheet are equal and the accounting equation is always true, i.e.,
Capital = Assets – Liabilities

According to this principle, every business transaction has a double (dual) effect on the business. This double effect can be recognised only by recording both the aspects of every transaction. There are two sides of every transaction. If one account is debited, any other account must be credited and vice-versa. The system of recording transactions on the basis of this principle is known as ‘Double Entry System’. It is due to this principle that the two sides of the Balance Sheet are always equal.

The following accounting equation will always hold good at any point of time.
Assets = Liabilities + Capital
OR
Capital = Assets – Liabilities
Whenever a transaction is recorded it must be recorded in two or more accounts to balance the equation.

6. The Revenue Principle:
This principle suggests that revenue should be treated as realised whenever the ownership of goods changes. It is immaterial whether the revenue is received in cash or not.

7. The Expense Principle:
According to this principle, every cost which is incurred to earn revenue is known as expense. Costs incurred on manufacturing, selling and distributing goods and services are expenses. Expenses should be recognised whenever incurred, irrespective of whether cash is paid or not.

Question 6.
(a) Describe any two stages of Marketing. [5]
(b) ‘Advertising is a Social waste Give reasons in support of your answer. [5]
(c) Explain any two causes responsiblefor the destruction of the ecosystem. [5]
Answer:
(a) Stages of Marketing : From subsistence level and self-sufficiency to modem marketing has been a long journey. With specialisation, self-sufficiency gave way to barter system. Advent of money led to the rise of markets and exchange system. The evolution of modem marketing can be traced through the following stages :

1. Production-oriented Stage (1869-1930):
In this stage, the motto was to ‘sell what can be produced.’ There was acute shortage of goods and there was no need to create demand. Product was the focus of attention and communication with the buyer was not needed. Products were manufactured on the assumption that customers would search and buy well-built and reasonably priced products.

In this stage, production and engineering departments shaped the company’s goals and strategy. Production- oriented stage lasted till the Great Depression. Its main drawback is that customers do not always buy products which are inexpensive and easily available.

2. Sales-oriented Stage (1930-1950) :
The Great Depression resulted in a situation that questioned the thinking/strategy of business firms. Drastic changes in buying habits and behaviour of consumers, technological advancements in transportation and communication and growth of corporate form of organisation also changed the thinking. Thus, the sales-oriented stage was characterised by hard selling. In the process of agressive selling unscrupulous practices occurred.

3. Product-oriented Stage (1950-1960):
In this stage, marketers believed that customers will buy the product if its quality was good. Firm made efforts to improve product features and performance. This has been called marketing myopia which means short sightedness.

4. Marketing-oriented Stage (1960-1980):
The modem concept of marketing recognises the role of marketing as a direct contributor to profits are well as sales volume. In order to survive and grow in this highly competitive world, a company must first determine what consumers want. Then produce that will satisfy consumers.

Consumer is considered as the ‘king’ in this stage.

5. Societal Marketing Stage (1980) :
The societal marketing concept requires the marketers to build social and ethical considerations into their marketing practices. They must balance company profits, consumer satisfaction and public interest. The stages of marketing given above are also known as concepts or philosophies of marketing.

(b) Although advertising has a lot of benefits, it has been criticised on the following grounds :

1. It increases the prices of the products or services: Advertising increases the total cost of a product which is ultimately borne by the consumer. Hence, every product gets costlier due to advertisement.
2. It promotes unnecessary consumption: Advertising promotes the consumption of goods and services which are even not required by the people. Hence, it is a wastage of national resources.
3. It promotes the sale of inferior goods: Advertisers make false claims about a product and persuades innocent people to buy inferior and undesirable products.
4. It misleads the consumers : Consumers get misled by so many brands product. For example, there are many brands of bathing soap and detergent on TV. Each brand claims that it is better than others. Consumer gets confused.
5. Decline in moral values: In order to attract attention of the people, advertisers use indecent language and obscene photographs.

(c) Destruction of Ecosystem
In recent decades, there has been rapid economic growth in India and several other countries. But development has led to increasing destruction of the ecosystem. The main causes of ecological damage are given below :
1. Population Growth :
Rapid growth of human population is a major cause of environmental problems. It has caused destruction of natural reasources, increasing extinction of species, soil erosion, falling water tables, pollution of rivers and increase of harmful emissions in atmosphere. Human population is growing beyond the carrying capacity of the planet.

As human population is growing and per capita consumption of resources is increasing, the ecosystem is being constantly destroyed. Need for more land is causing deforestation. Rural land is being converted into urban settlement and open spaces are vanishing. The mass scale destruction of flora and fauna has disturbed the ecological balance.

2. Industrialisation :
Setting up of more and more industries and expansion of existing industrial units is leading to clearing of forest land and fertile agricultural land. Biological diversity is being lost forever. Industrial wastes and manufacturing processes have a direct adverse effect on the environment. Industries produce chemicals, fertilisers, dyes, paints.

Industrialisation is an important cause of air pollution and water pollution.

3. Dwelling of Business Units:
In order to accommodate the migrating population to industries and commercial cities, more dwelling units are being developed.

4. Mining :
Mining involves removal of minerals and other materials from the earth’s crust for use by people. In India, more than 80,000 hectares of land is under the stress of mining activities. These activities involve removal of plant cover (deforestation) along with the underlying soil mantle and excavating overlying rock masses. Mining leads to :

1. disruption of surface and groundwater circulation
2. reshaping of topography
3. generation of greater volumes of waste (debris)
4. severe contamination of water by mine wastes
5. soil erosion (v0 landslides
6. degradation of land

5. Agriculture :
Growing of crops involves use of fertilisers and pesticides, creation of irrigation and drainage facilities and removal of weeds. These activities cause degradation of ecosystem in the following ways :

1. irrigation without sufficient drainage leads to accumulation of water (waterlogging) or salts (salinisation) and rise in the soil water table leading ultimately to degradation of soil quality.
2. excessive use of fertilisers and pesticides causes bio-accumulation in the foodchain. These agro-chemicals degrade the quality of soil and destroy the ecosystem.
   Urbanisation and wars also cause destruction of the ecosystem.

Question 7.
(a) Explain any two types of interviews conducted by an Enterprise in the selection of its employees. [5]
(b) “Real investment in today’s society is not in plant and machinery: it is in people With reference to the above statement, examine the importance of Human resources in a business organisation. [5]
(c) Distinguish between a Cheque and a Demand Draft. [5]
Answer:
(a) Interviews
Selection or employment interview is a formal conversation between a candidate and the employer to judge the former’s suitability for a job. It is a face-to- face encounter with the purpose of assessing the facial expression, postures, gestures and speaking skills of candidates. Interview is also beneficial to the candidate as he gets the opportunity to know about the job and the organisation.

The following types of interviews are used in selection of employees :
1. Structured or Patterned Interview:
This interview is systematically planned in advance and is conducted in a pre-planned manner. The questions to be asked and the time to be allowed to a candidate are decided in advance. This is the most common type of selection interview.

2. Unstructured or Non-Directive Interview :
This interview is not planned in advance. The questions to be asked and the expected reactions are not decided. Candidates are asked their views on relevant matters. This type of interview requires experienced interviewers.

3. Group Interview :
In this interview, a group of candidates are interviewed at the same time. They are given a problem for discussion and candidates express their views on the problem. The interviewers judge the views and initiative taken by the candidates.

4. Panel or Board interview:
In this type of interview, the candidate is interviewed by a panel or board of selectors. Different interviewers ask questions on different topics. The candidate is judged on the basis of combined rating by the panel.

5. Stress Interview :
The purpose of this interview is to see how candidates react to awkward questions and difficult situations. The interviewer deliberately adopts a hostile attitude by asking questions rapidly, by criticising the candidate, etc. The reactions of the candidate to stressful conditions is judged. If the candidate keeps himself cool he is selected.

(b) Human resources are the number of people working in an organisation together with their knowledge, skills, experience, attitudes, motivation and potential. Importance of Human resources in a business organisation are :
1. HR monitors the culture :
Some organisations say that HR owns the culture, but as in all other employee relations matters, it recommend that the ownership is spread across all employees.

2. HR owns the overall talent management processes :
In conjunction with other managers, HR leads the way in management development, performance management, succession planning, career paths, and other aspects of talent management. HR can’t do it alone and relies heavily on managers and executive staff to help plan and execute the strategies. But, HR has to bring new ideas and effective practices into the organisation.

3. HR is responsible for the overall recruiting of a superior workforce : HR must provide leadership, training, scheduling assistance, a systematic hiring process, recruitment planning processes.

4. HR recommends market-based salaries and develops an overall strategic compensation plan : HR provides guidance to managers as they determine the salary ranges within their organisations.

5. HR researches, recommends, and implements employee benefits programs that attract and retain your best employees : HR is also responsible for controlling costs and considering various options before recommending adoption.

6. HR is responsible for recommending and instituting strategies for people and the organisation that further the attainment of the organisations’ strategic goals : If the organisation is changing direction, developing new products, changing mission, vision, or goals, HR must lead the way with employee programs and processes.

7. HR makes sure that workplace activities, events, celebrations, ceremonies, field trips, and team building opportunities are occurring : Other employees plan and implement the activities with or without HR’s help, but the HR leader is generally responsible for monitoring the budget and providing committee oversight.

8. HR advocates for employees who have issues or conflict with management and coaches managers and executives who seek a more effective approach to working with particular employees : Not everyone loves each other but they need to develop effective working relationships for contributions and productivity. HR can help by knowing the players and taking on the necessary role of advocate, coach and/ or mediator.

The importance of HR is easily overlooked in the busy day-to-day in the workplace, but without contributions in each of these areas, the organisation would be less successful.

(c) Distinction between a Cheque and a Demand Draft

	Basis of Distinction	Cheque	Bank Draft/ Demand Draft
1.	Drawer	A cheque is drawn by a person.	A bank draft is always drawn by a bank.
2.	Bearer	A cheque can be drawn payable to bearer.	A draft cannot be made payable to bearer.
3.	Charges	In case of a cheque the person who receives the payment has to pay collection charges.	In case of a draft commission is paid in advance by the sender of money.
4.	Dishonour	A cheque is dishonoured if the funds in the drawer’s account are insufficient.	The draft amount is taken in advance by the bank. There is no question of a draft being dishonoured.
5.	Stop payment	The payment of a cheque can be stopped by giving a written notice to the concerned bank.	The payment of a bank draft cannot be so easily stopped.

Question 8.
Write short notes on:
(a) Persuasion and Empathy as elements of Public Relations. [5]
(b) Benefits of Training to a Business Enterprise. [5]
(c) Uses of Income and Expenditure Accounts. [5]
Answer:
(a) Meaning of Persuasion :
Persuasion is an important element of public relations. It is through some kind of communication that persuasion takes place. To persuade means to convince another person of some idea, product, service or institution, to induce a person or group or to do something. We are all engaged in persuasion. The young man is persuading his beloved to marry him.

The teacher is persuading his students to learn. The politician is persuading the voters to vote for him and his party. There are two forms of interaction between individuals and groups – force and persuasion. When one person compels another to do something it is interaction through force. This form of interaction is considered as an improper conduct in a civilised society. Interaction through persuasion involves convincing the other person. This is considered the right conduct.

A flexible approach is helpful in persuading others. Before engaging in persuasive communication, a person must settle a few questions in his mind : What do I want to accomplish? What are the interests of the people to whom I shall be talking? What are the facts I should tell them? A sense of human interest is necessary for anyone indulging in persuasion. The speaker has to ensure that people understand, approve and accept him and his words.

Experts have identified the following principles of persuasion:
(a) Acceptance of the message is a critical factor in persuasive communication. Therefore, to change attitudes of people, suggestion for change must first be received and accepted.
(b) A suggestion is more likely to be accepted if it is in conformity with needs and desires of people.
(c) A suggestion is more likely to be accepted when it is in hannony with group norms and loyalties.
(d) A suggestion in the mass media should be reinforced with face-to-face interaction.
(e) A suggestion is more likely to be accepted when the source is perceived as reliable or expert.

Meaning of Empathy:
Empathy means looking at things and events from the other’s point of view. It requires that the communicator be in tune with the communicate. The former should understand the attitude of the latter. For example, a good speaker should know the emotions and sentiments of his audience.

Empathy involves seeing and feeling matters as others see and feel. It enables an executive to be sensitive and sympathetic to the attitudes, expectations and problems of his workers and clients. A person with empathy can be receptive and appreciative of the ideas and opinion of others.

Empathy contributes to success of public relations in several ways. It fosters greater understanding and improves relationship with the client. Empathy tells an executive when he should talk and when he should remain silent. It tells when to be firm and when to be restrained. An empathic executive is more accurate in interpreting what a client says or does.

Empathy is different from sympathy. Empathy is feeling with the other person whereas sympathy means feeling sorry for the other person.

Empathy can be created in communications by adopting the ‘you attitude’. For example, in writing letters we should avoid T and ‘We’ and instead use ‘You’. In any case we should not forget that the reader’s point of view in the whole of the letter. An example of ‘you attitude’ is given below:

We attitude	You attitude
We have four differ­ent savings schemes in which our cus­tomers can invest their savings.	You have a choice of four savings schemes in which you can invest your savings.

(b) Following are the benefits of training to a business enterprise :

1. Increased Productivity: Training helps to improve the quantity and quantity of work performance. Well- trained employees produce more and more better quality products.
2. Better Safety : Training helps to improve the job knowledge and skills of employees. Trained employees operate machines and equipments more carefully and cause fewer accidents.
3. Expansion and Growth : With the help of trained staff an enterprise can expand and grow easily. Loss of a few employees does not threaten its survival. Trained employees can adapt more easily to technological advancement and competitive environment.
4. Less supervision : Well-trained employees are less dependent on supervision. They are more disciplined, self-dependent and responsible. Therefore, need and cost of supervision are reduced.
5. Reduced Turnover and Absenteeism : As trained employees feel more satisfied and interested in jobs, labour turnover and absenteeism are reduced.

(c) Income and Expenditure Account Meaning:
Income and Expenditure Account is an account prepared by a non-trading organisation to ascertain the surplus or deficit for an accounting year. It is equivalent to the Profit and Loss Account of a business concern.

It is a nominal account and is prepared with the help of Receipts and Payments Account and other relevant information. It contains all incomes and expenses relating to the current year, whether actually received/paid or not. Therefore, adjustments are made in the receipts and payments shown in the Receipts and Payments Account.

In Income and Expenditure Account incomes are shown on the credit side and expenses are shown on the debit side.
Uses: The main uses of Income and Expenditure Account are as follows :
(a) Income and Expenditure Account shows the surplus or deficit arising from the activities of a non-trading concern during a year.
(b) It shows all items of income and expenditure. With the help of this information, the organisation can take steps to increase income and reduce expenditure.
(c) It serves as the basis for preparing the Balance Sheet of a non-trading organisation.
(d) It fulfils the statutory requirements because non-trading organisations are legally required to prepare it.

Question 9.
CASE STUDY
With a glorious history of more than 50 years blended with a futuristic outlook, The Presidency Bank has become a leading financial institution. The Bank with its customer centric approach values transparency and nurtures knowledge and learning. It believes in the quality of its people and their efforts and therefore takes continuous initiatives for hiring the best talent and ensuring their development, motivation and growth through intensive training.

The Bank offers excellent career opportunities to dynamic individuals. In addition to exposure to a variety of banking segments, the Bank also provides personal growth opportunities for its employees.

With reference to the above:
(a) Suggest a suitable source of recruitment for the Bank. Give reasons to support your answer. [5]
(b) What Employment tests should be conducted by the Bank to select its employees? [5]
(c) What type of Training methods should be adopted by the Bank to train its employees? Why? [5]
Answer:
(a) Internal sources of recruitment is suitable for the bank as that the employees already working in the organisation. The existing employees may be shifted from one place to another and from one post to another to fill up vacancies. The sources of internal recruitment are as follows :
1. Transfer:
A transfer means shifting of an employee from one place to another without any change in rank, responsibility and remuneration. It is a horizontal movement of the employee. Job vacancies in one factory, branch or office of the organisation may be filled by transferring surplus staff from another factory, branch or office.

2. Promotions :
A promotion means shifting an employee from a lower post to a higher post. It leads to increase in the pay, status and responsibility of the employee. Therefore promotions are considered as rewards. Promotions may be made on the basis of merit or seniority of employees. Apromotion involves a vertical movement or advancement of an employee.

3. Demotions:
An employee who is unable to perform his duties properly may be shifted to a lower post. Demotion involves reduction in the pay and status of the employee. It is considered a serious penalty and is therefore used in exceptional cases.

4. Ex-Employees :
The retired employees of the organisation may be recruited for a temporary period to meet abnormally high rush of work in an organisation.

(b) Tests have become a popular technique of selecting employees. Selection tests assess the attitude and performance of candidates with the help of psychological techniques.

Following are the tests that are conducted by the bank to select its employees:
(i) Achievement Tests:
Achievement tests measure the skills and knowledge which the candidate already possesses at the time of testing. These tests help to determine whether the claims made by the candidate about his knowledge and skills are correct or not. The candidate is asked to perform the job and his actual test performance indicates his proficiency. For example, the candidate for the post of a typist may be, asked to type a page so as to judge his speed and accuracy.

Achievement tests are of following types :
Dexterity Tests :
These tests are designed to ascertain how swiftly and efficiently a candidate uses his hands, fingers, eyes and other parts of the body. These tests are useful for judging candidates for a job which requires use of different parts of the body in a coordinated manner.

Intelligence Tests:
These tests measure a person’s capacity for listening and comprehension in terms of his vocabulary, mental alertness, memory, reasoning, etc. An applicant’s intelligence quotient (IQ) can be judged through intelligence tests.

(ii) Aptitude Tests :
Aptitude means an individual’s potential for learning the skills required for a job. Aptitude tests measure a candidate’s capacity and his potential for development.

Aptitude tests are of following types :
Personality Tests: Personality tests are designed to judge the emotional balance, temperament and maturity of a candidate. They reveal the ability of an applicant to adjust to new situations and new persons. They are helpful for selecting persons for managerial jobs.

Interest Tests: These tests are aimed at assessing the type of work in which a candidate shows special interest and involvement. The type of jobs which will be satisfying to the employees can be identified with the help of interest tests.

(c) Following are the types of training methods that should be adopted by the bank to train its employees :
Methods of Training:
(i) Coaching or Mentoring :
In this method, the supervisor instructs and guides the trainee. The new employee leams the ins and outs of the job under the guidance of his supervisor. This mothod improves relationship between the worker and his supervisor. But the method can be effective only when the supervisor is competent and takes interest in training.

(ii) Under Study :
Under this method, the trainee is imparted training by a senior and experienced employee. The trainee is designated as the successor to the trainer and learners by observation and imitation. The purpose is to prepare the trainee to fill the vacancy arising from the retirement or promotion of the trainer.

(iii) Job rotation :
In this method, the trainee is periodically rotated from job to job. The purpose is to broaden his outlook and give a general background of different jobs. The trainee leams a variety of tasks and develops a better view of the organisation. But it may cause disruption in work routine. Few persons have the capacity to move from one job to another. Therefore, the persons to be trained and the jobs to which they are to be rotated should be selected carefully.

The training methods should be adopted by the bank to train its employees because such methods lead to increaseed productivity, better utilisation of resources, better safety and Higher Morale.

Question 10.
CASE STUDY
Mbees Tech Ltd. has added its latest addition the Zt and Zht smartphones to its smartphone family. These have created a record ofsorts by selling more than 1 lac phones in three days since they were launched.

However Mr. Pawan, CEO of Mbees Tech Ltd., believes that the Company could have bettered their sales if the supply was met as per the demand for its exciting new range of smartphones.

Mr. Pawan also added that the company stands to deliver on its promises and hence the production capacity has been increased to meet the ever rising demands of its newly launched smartphones that have unmatched features at highly competitive prices.

With reference to the above :
(a) Explain the pricing strategy that Company has adopted to sell its new smart-phones. [5]
(b) Suggest a suitable media to advertise the newly launched smartphones of M/s Mbees Tech Ltd. [5]
(c) Explain the stage of the product life cycle of the smartphones as mentioned in the above case study with the help of a diagram. [5]
Answer:
(a) Pricing strategies provide a framework within which pricing decisions can be taken systematically to achieve the pricing objectives. These strategies provide guidelines for deciding and implementing prices for different products and markets. A sound pricing strategy facilitates a balanced and rational approach to pricing decisions. For this, skim the cream pricing strategy is appropriate because the product is meant for rich people.

Skimming pricing is effective for new and distinctive products due to the following reasons :
(a) In the early stages, the product is distinctive and imitation has not taken effect. Therefore, price is less likely to affect the sales volume i.e., the demand is inelastic.
(b) High price in the initial stages will provide funds for expansion into the big volume segments of the markets.
(c) Skimming pricing takes the cream of the market before attempting to penetrate the more price sensitive sections of the market.
(d) The strategy can be used to feel out the market. It is easier to start out with a high initial price and reduce it later than to set a low price initially and then raise the price to cover unforeseen costs.
(e) By setting initial price at a high level the manufacturer can restrict demand to the level which he can meet.

(b) Advertising media are the channels through which the advertising copy or message is brought to the notice of present and potential buyers. There are following suitable media to advertise the newly launched smartphones of M/s Mbees Tech Ltd.
1. Newspapers :
Newspapers are popular and widely used medium of advertising. Its main advantages are :
(a) Newspapers have wide circulation. Therefore, this medium has a very wide coverage.
(b) Due to wide coverage cost per reader is low.
(c) There is continuity as the message can be repeated daily.
(d) There is flexibility as the message can be modified frequently.
(e) Regional newspapers can be used to focus on selected areas.

2. Films :
Film slides containing advertisements are shown in cinemas before the start of the feature film and during intermission. Along with the photo of the product there is a running commentary on its features and uses. It has the following advantages :
(a) It is very effective due to the combined effect of spoken words and visual.
(b) It has a wide coverage as a large number of people visit cinema in a day.
(c) The advertisement can be shown in selected cinema to focus on a selected region.

3. Outdoor Advertising :
This is a very old medium. It consists of posters, billboard, neon sign, wall writings, signboards on buses and other public vehicles, etc.
Its advantages are :
(a) It attracts attention quickly.
(b) It has a long life.
(c) It has a wide appeal.
(d) It is very selective in terms of geographical coverage.
(e) It is economical.

(c) Stages of the company’s product life cycle are as follows :
1. Introduction Stage :
During this stage, the product is bom. It may be entirely a new product or a new version of some basic product. The firm informs the market about the existence and features of the product. Competition is virtually absent, market is limited, prices are relatively high and little is known about the product innovation.

Growth in sales volume is at a low rate due to lack of knowledge on the part of consumers and limited distribution. Prices are usually high because of small scale of production and heavy promotional expenditure. Thus, the introduction stage is characterised by high costs, low sales volume, limited distribution and high prices. This stage is very risky because a high percentage of new products fail during this period.

The following diagram shows the product life cycle of a company.

2. Growth Stage :
In this stage, the demand and sales grow rapidly. Distribution is widened competition increases, and prices fall. The firm may increase sales by entering new markets. Profits rise and improvements may be made in the product.

3. Maturity Stage:
During this stage, sales continue to grow but at a declining rate. Competition increases further and markets get stabilised. Profits are reduced due to competition. This stage is characterised by product differentiation, product improvement and identification of new product segments.

4. Decline Stage :
This stage is characterised by either the product’s gradual displacement by new and superior products or change in consumer’s buying behaviour. Sales fall down sharply and promotional expenditure has to be reduced drastically to minimise loss. The emphasis is on efficient distribution at lowest cost. Unless new uses of the product are found the sales may decline rapidly and the product may soon go out of the market.

5. Abandonment of Product:
Most firms shift their attention to other products, gradually phasing out the declining product. They abandon the product in order to make better use of their resources. Preferences of consumers may change and new innovations enter the market to take the place of the abandoned products.

Some firms try to postpone abandonment by introducing new models with unique features. In case of heavy losses and no future, the firm may sell out and merge with a stronger enterprise.

Solving ICSE Class 10 Commercial Studies Previous Year Question Papers ICSE Class 10 Commercial Studies Question Paper 2012 is the best way to boost your preparation for the board exams.

ICSE Class 10 Commercial Studies Question Paper 2012 Solved

Section – A (40 Marks)
(Attempt All Questions)

Question 1.
Distinguish between:
(a) Stakeholders and Shareholders. (2)
(b) Verbal Communication and Non-verbal Communica-tion. (2)
(c) Internal Recruitment and External Recruit-ment. (2)
(d) Packing and Packaging. (2)
(e) Public Warehouses and Bonded Warehouses. (2)
Answer:
(a) Difference between Stakeholders and shareholders :

1. A shareholder owns part of a company through stock ownership, while a stake- holder is interested in the performance of a company for reasons other than just stock appreciation.
2. Shareholders are stakeholders in a corporation, but stakeholders are not always shareholders.

(b) Difference between Verbal Communication and Non-verbal Communication:
Verbal Communication : Verbal communication means communications through words. It can be either

(i) oral or
(ii) written.

(i) Oral communication means conveying of messages through spoken words, e.g., Face to face talks, interviews, lectures, and telephonic conversation, etc.
(ii) Written communication means transmission of message through written words, e.g., letters, circulars, fax messages, notices, reports, etc.

Non-verbal Communication :

1. Non-verbal communication is also known as Gestural communications.
2. Gestural communication involves use of gestures.
3. It refers to communications through body language without using words. A smile, twinkling of eyes, nodding of head, etc.

(c) Internal & External Recruitment:

1. An internal recruitment strategy is one which promotes employees from within an organisation to fill upcoming positions whereas an E.R. strategy is one which systematically search the employee pool outside its own employees to fill positions.
2. Many firms use such devices as job posting boards, email flashes, internet posts to fill positions whereas in external recruitment many firms use advertisements in newspapers, job search websites, job fairs, etc.

(d) Difference between packing and packaging : Packing is an augmented activity that adds value to the product e.g., packing a soap or a utensil or many such products. Packaging is a part of the core product, which cannot be a choice e.g., packaged drinking water or package edible oil, milk etc.
Packing is a verb – as in ‘You pack something’ into a box. Packaging is a noun referring to the material used during the process of packing.

(e) Difference between Public Warehouses and Bonded Warehouses :

Public warehouses : Public warehouses can be used for storage of goods by traders, manufacturers or any member of the public after the payment of a storage fee or charges. The government regulates the operation of these warehouses by issuing licences for them to private parties.
These warehouses provide facilities like transportation by rail and road.

Bonded warehouses : Bonded warehouses are licensed by the government to accept imported goods prior to payment of tax and customs duty. Importers are not permitted to remove goods from the docks or the airport till customs duty is paid.
These warehouses have facilities for branding, packaging, grading and blending.

Question 2.
(a) What is meant by Deferred Revenue Expenditure ? (2)
(b) State any two expectations of suppliers from a business organisation. (2)
(c) What do you understand by Formal Communi-cation ? (2)
(d) Mention the Interpersonal Skills required for effective communication. (2)
(e) What do you mean by Sale on approval or Return ? (2)
Answer:
(a) Deferred revenue expenditure refers to the revenue expenses the benefit of which extends beyond the current accounting year. A portion of this expenditure is debited to the Profit and Loss Account in the current year and the remaining portion is shown as an asset in the Balance Sheet. This amount is charged as revenue expenditure in future years. For example, heavy advertising expenditure, heavy repairs and research expenses is incurred to introduce a new product in the market.

(b) Expectations of Suppliers from a Business Organisation : Every business organisation required a healthy and honest relation with suppliers in order to meet

1. All dealings with suppliers should be based on fair terms and conditions regarding prices, quality of goods, delivery of payments, etc.
2. Undercutting and other unfair trade practices should be avoided.
3. Suppliers should have correct information about the organisation’s financial position.

(c) Formal Communication : Formal communication is that which takes place through the formal channels of the organisation structure deliberately and consciously established by the management. It implies the flow of the information along the lines of authority formally established in the enterprise. Members of the enterprise are expected to communicate with one another strictly as per channels laid down in the structure. For example, when the chief executive issues decisions and instructions to the subordinates, there is a formal communication which flows downward. In the same manner formal communication flows upward when the subordinate reports to the superior. Such communications are generally in writing and may take any of the following forms:

1. Policy manuals
2. Procedural and rule books
3. Official meetings
4. Interviews
5. News bulletins, etc.

(d) Interpersonal Skills Required for Effective Communication :

1. Compassion : In order to communicate effectively, the communicator must understand the intelligence level and background of the receiver. He must know what information the receiver exactly needs and in what form. Matching of wave lengths is necessary for creating a meeting of minds.
2. Attention : Careful listening is essential for effective communication. The communicator should convey the message in such a way that the emotions and sentiments of the receiver are not hurt. Emphathetic listening and open mind are necessary for this purpose.
3. Clarity : Clarity of thoughts is the first essential of good communication. The message must be perfectly clear and free from all ambiguity. The language used should be simple. Different components of the message must be logical and well knit. Technical jargon and high sounding words should be avoided.
4. Brevity : All communication should be brief. Meaningless words and information overload spoil a message. Unnecessary repetition and over-elaboration should be avoided. The message should be concise and concrete.

(e) Sale on Approval or Return : Under this method, goods are actually sent to the prospective buyer for inspection and approval. If the buyer is satisfied with the quality of the goods, he intimates to the seller that he has approved the goods. After this it becomes a contract of sale. If he does not approve the goods, there can be no contract of sale and goods have to be returned. If the prospective buyer keeps the goods without notice of disapproval beyond the stipulated period, he is deemed to have agreed to purchase the goods.

Question 3.
(a) Mention any two points of dfirence between Advertising and Publicity. (2)
(b) Give two points of dijference between Fixed Cosi and Variable Cost. (2)
(c) Why is a Master Budget also known as Summary Budget? (2)
(d) What is Banking? (2)
(e) Selection is a negative process. Explain. (2)
Answer:
(a) Difference between Advertising and Publicity:

Basis	Advertising	Publicity
1. Target Group	It is targeted at ultimate consumers.	It is targeted at final consumers along with all types of middlemen.
2. Payment	The marketer pays for the advertisement.	The marketer does not pay for publicity.

(b)
Difference between Fixed Cost and Variable Cost :

Fixed Cost	Variable Costs
1. Fixed costs remain constant within a given period of time and range of activity in spite of a change in the volume of output. 2. Fixed costs are uncontrollable in the short-run.	1. Variable costs vary more or less proportionately with variations in the volume of output. 2. Variable costs are usually controllable.

(c) A Master Budget is also known as a Summary Budget because it is a summary of the budget schedules in capsule form made for the purpose of presenting one report on the highlights of the budget forecast. It is defined as “the summary budget, incorporating its component Junctional budgets, which is finally approved, adopted and employed. ” Thus, the master budget is a summarised form of all the budgets of a firm. This budget requires the approval of the Budget Committee before it is put into action.

(d) Banking: Commercial banks are an important institution of the economy for providing institutional credit to its customers. A banking company in India is the one which transacts the business of banking which means accepting, for the purpose of lending and investment of deposits of money from the public, repayable on demand or otherwise and withdrawable by cheques, draft, order or otherwise.

(e) Selection is a Negative Process: Selection is the process of choosing individuals who have the requisite qualifications to fill the jobs. In other words, selection involves screening or evaluation of applicants to identify those who are best suited to perform the jobs which have fallen vacant in an enterprise.

Selection is frequently described as a negative process as it is a process of rejecting many unsuitable candidates to choose the few suitable applicants.

Question 4.
(a) Mention two methods of Off-the-Job Training. (2)
(b) What is meant by Industrial Disputes ? (2)
(c) State two disadvantages of Water Transport. (2)
(d) Mention any two documents used in Warehousing. (2)
(e) Why do we need The Consumer Protection Act, 1986 ? (2)
Answer:
(a) Off-the-Job Training : This method of training is designed to impart training to personnel by supplying them the required knowledge and skills away from the job and work place.
Some of the major methods of off-the-job training are as follows:

1. Lectures : Here, a subject specialist is invited to deliver lectures on specific subjects to enhance the knowledge of the participants. The specialist delivering the lectures allows participants to share with him the specialised knowledge.
2. Seminars and workshops : This method of training is aimed at creating an awareness of the knowledge of fundamentals. This is a knowledge-based method of training, which is widely used by educational institutions and professional bodies.

(b) Industrial Disputes : Industrial dispute means any dispute between employers and employees or between employers and workmen or between workmen and workmen, which is connected with the employment or non-employment or the terms of employment or with the conditions of labour of any person.
Industrial disputes may result in strikes, walkouts and secondary boycotts by workers and lockouts by management.

(c) Disadvantages of Water Transport:

1. Water transport is not suitable for carrying perishable goods as its speed is low and the port of destination may be far away from the consumption centre.
2. There are a large number of risks inherent in carrying goods through sea.
3. The waterways may not be navigable due to seasonal changes.

(d) The documents used in warehousing are as follows :

1. Warehouse warrant : When goods are stored in a public/bonded warehouse, the warehouse keeper issues a warehouse warrant in favour of the owner of goods. This warrant is a document of title and can be transferred by simple endorsement and delivery. It is a document certifying that the specified goods have been deposited in the warehouse for safe keeping.
2. Warehouse keeper’s receipt : This is a receipt of acknowledgement of the goods by the warehouse keeper. It serves as a proof of storing the specified goods in the warehouse. It is not transferred by transferring the receipt.

(e) The Act recognises consumers’ right to safety, right to be informed, right to choose, right to be heard, right to seek redressal and right to consumer education.

Thus, we need the Consumer Protection Act for the following reasons:

1. To protect the interests of the consumers
2. To seek speedy and simple redressal to consumer disputes through a quasi-judicial machinery.
3. To inform and educate the consumer.

Section – B (40 Marks)
(Answer Any Four questions from this section)

Question 5.
(a) Distinguish between a Cheque and a Demand Draft. (5)
(b) Describe any two objectives of Brand Promotion. (5)
Answer:
(a) Distinguish between a Cheque and a Demand Draft:

Cheque	Demand Draft
1. A cheque is drawn by a person.	1. A demand draft is always drawn by a bank.
2. A cheque can be drawn payable to bearer.	2. A draft cannot be made payable to bearer.
3. In case of a cheque, the person who receives the payment has to pay collection charges.	3. In case of a draft, commission is paid in advance by the sender of money.
4. In case of a cheque, the payee does not receive cash immediately on presentation.	4. Demand drafts can be encashed immediately on presentation at the counter of the bank on which they are drawn.
5. The payment of a cheque can be stopped by giving a written notice to the concerned bank.	5.The payment of a demand draft cannot be so easily stopped.
6. In case of insufficient funds in the drawer’s account, the cheque is dishonoured.	6. There is no question of a draft being dishonoured because the draft amount is taken in advance by the bank.

(b) Objectives of Brand Promotion : Effective brand promotion drives the sales and builds the market share of a company. It promotes company’s products, reinforces their value to the customers and increases brand awareness. Owing to rightly directed brand promotion efforts, consumers reward the company through increased purchases and brand loyalty.

Generally, the following are considered to be the major objectives of brand promotion :

(i) Providing Information : A large part of a company’s brand promotional efforts has always been directed at providing proper and complete information to the customers about its various brands offered in the market. Brand promotion information contains the following things: new products launched; how they work; existing products; prices; selling centres; hours of sale; special schemes or offers such as percent off, discount, free gifts, more guarantee period; and so on.

(ii) Emphasizing the Value of the Brand: Brand promotion emphasizes the wonderful ownership utility of a brand to the buyers. For example, utility of owning a Mercedes Benz Car or an LG Air conditioner or LG Refrigerator. The name (brand) value of a product justifies its higher price in the market. Status-oriented advertisements usually highlight the value of the product and grace of its ownership.

(iii) Differentiating the Brand : A frequent objective of brand promotion is ‘brand differentiation’ which means to convince the potential (future) buyers about distinctive or unparallel (unmatchable) merits or features of the branded product that are not to be found in other competing products. For example, HCL company in its advertisement differentiates its personal computers on the feature of competing price while it says, “Leaders in Price”. Pepsi differentiates its brand by using the slogan, “The choice of a new generation.”

(iv) Stabilizing Sales : A firm’s sales may not be uniform throughout the year. Such sales fluctuations may be caused by cyclical, seasonal or irregular demand. Firm’s brand promotion strategy often has a goal of stabilizing these variations in demand. For example, coffee sales is seasonal (winter season choice). To stimulate its summer sales, a company may promote its new brand of ‘iced coffee’ (cold coffee).

Question 6.
(a) Explain any two methods of conducting ‘Marketing Research. (5)
(b) Give any five reasons why people consider advertising a Social waste. (5)
Answer:
(a) Marketing Research : “Market research is the systematic recording, analysing and synthesising of data about marketing problems which lend to make it specialised.”
From the above definition, it is apparent that market research involves data analysis and a comprehensive application of that analytical study to make marketing function an effective revenue earner. It analyses how much to produce, how much to store, method of distribution, systematic consumer analysis, increasing competition from similar business houses, widening consumer demand, etc.

Two of the major methods of conducting market research are as follows :

1. Observation Method : Observation refers to the process of recognizing and noting events. Under this method, the behaviour of consumers is watched through personal observation or mechanical devices. The observation method avoids the pitfalls of questioning such as interference in the consumers activity, etc.
2. Survey Method : This method involves getting answers to specific questions from the entire market or a representative sample of it. A survey is a detailed enquiry to collect information from either the entire universe or part of it. When the survey of all the units of information is made, it is known as enquiry or Survey.

(b) Advertising as a Social Waste : Some people consider advertising a social waste because of the following reasons:

(i) Higher prices : Advertising involves huge expenditure there by increasing the cost of distribution. Manufacturer and traders charge higher prices from consumers to recover the money spent on advertising. However, excessive and unbalanced advertisements increase costs and prices. Effective advertisements help to reduce costs and price by widening markets.

(ii) Artificial living : Advertising multiplies the needs of people and encourages wasteful consumption. It persuades people to buy products which they do not need or cannot afford. People are encouraged to buy products even which are harmful to their health e.g., cigarettes, wine, etc. Advertising promotes artificial living and extravagance by creating demand for trivial goods.

(iii) Misleading : Advertising is often deceptive and misguides consumers. Exaggerated and false claims are made in advertisements to dupe innocent people. Bogus testimonials and other questionable means are used to sell goods of doubtful value.

(iv) Growth of monopolies : Advertising creates brand preference and restricts free competition. Large and well-established firms spend huge amounts on advertisements to kill new and small concerns. Advertising encourages the survival of the mightiest rather than of the best.

(v) Wastage of national resources : Manu- facturers create trivial and artificial differences in their products to develop brand loyalty through advertising. The natural resources, capital equipment and labour which go into the production of such items amount to waste as these could better be employed in creating new industries. Valuable stationery, time and energy used in advertisements go waste because most of the advertisements either escape the attention of people or are ignored by them.

(vi) Unethical: Many advertisements are highly objectionable because they undermine moral values and ethics. Vulgar advertisements offend public decent and encourage materialism in society. Advertisements may also spoil the landscape and divert attention of people driving on roads.

Question 7.
(a) Explain the term Social Security. Describe any two Social Security measures adopted in India. (5)
(b) Explain any two types of employment tests which are conducted to select employees for an enterprise. (5)
Answer:
(a) The concept of social security is essentially related to the high ideals of human dignity and social justice. It is primarily an instrument of social and economic justice. According to I.L.O., “Social security is the protection which society provides for its members through a series of public measures, unemployment, invalidity, old age and death, the provision of subsidies for families with children.” The purpose of social security is to provide an income up to a minimum and also medical treatment to bring the interruption of earnings to an end as soon as possible.

Social Security Measures adopted in India : India is a welfare state and thus social security is an essential component of government policy.
The Central and State Governments in India have introduced various types of social security measures and programmes, some of which are as follows :

(i) Provident Fund Scheme : The Central Government has established the provident fund scheme for employees in which every employee is entitled to become member of the scheme after completing a fixed period of continuous service. The employee and the employer contribute every month ten per cent of the basic wages. An employee can get advances and permanent withdrawals for construction of house, and other specified purposes, like serious illness. The accumulated amount of standing credit to an employee is payable on retirement, death or at the time of leaving service.

(ii) Group Insurance : Group Insurance is a scheme which provides insurance cover on the lives of several persons under one insurance policy or contract. The insurance on each life is, however, independent of that on the other lives.

The main features of group life insurance are as follows:

(a) Insurance is provided to all employees without any evidence of insurability.
(b) It provides risk coverage to the employees as long as they remain in the service of the employer.
(c) Group Life Insurance is basically a contract between the insurance company and the employer.

(iii) Pension : Under the Employee’s Provident Funds and Miscellaneous Provisions Act, the Government of India has framed family pension scheme to provide family pension benefits to the employees. The scheme was launched with the objective of providing long term recurring financial assistance to the employee after retirement and to his family in case of premature death while in service.

Family pension is payable :

(a) to the widow of the deceased employee;
(b) to the eldest surviving minor son until he attains the age of 21 years (in the absence of the widow of the employee);
(c) to the eldest surviving unmarried daughter until she attains the age of 24 years or marries whichever is earlier (in the absence of widow of the employee);
(d) in the event of remarriage or death of the widow, the family pension will be granted to the minor son/daughter through the natural guardian.
Pension is payable at the rate of 50 percent of the pay drawn on the date of retirement. An employee can get a part of the pension computed and get a lump sum amount. The balance pension is paid every month.

(b) Employment Tests : Employment tests have become a popular technique of selecting employees. A test is a systematic comparison of the work behaviour of candidates on sample basis. Selection tests assess the attitude and performance of candidates with the help of psychological techniques. An attempt is made to assess the match between the applicants and job requirements.
Types of tests used in employing are as follows :

(a) Proficiency Tests : Proficiency testing is also called interlaboratory comparison. This testing compares the measuring results obtained by different laboratories.

(i) Achievement Tests : Achievement tests measure the skills and knowledge which the candidate already possesses at the time of testing. The candidate is asked to perform the job and his actual test performance indicates his proficiency. For example, the candidate for the post of a typist may be asked to type a page so as to judge his speed and accuracy.

(ii) Dexterity Tests : These tests are designed to ascertain how swiftly and efficiently a candidate uses his hands, fingers, eyes and other parts of the body. These tests are useful for judging candidates for a job which requires use of different parts of the body in a coordinated manner.

(iii) Intelligence Tests : These tests measure a person’s capacity for listening and comprehension in terms of his vocabulary, mental alertness, memory, reasoning, etc. An applicant’s intelligence quotient (IQ) can be judged through intelligence tests.

(b) Aptitude Tests : Aptitude means an individual’s potential for learning the skills required for a job. Aptitude tests measure a candidate’s capacity and his potential for development.

(i) Personality Tests : Personality tests are designed to judge the emotional balance, temperament and maturity of a candidate. They reveal the ability of an applicant to adjust to new situations and new persons. They are helpful for selecting persons for managerial jobs.

(ii) Interest Tests : These tests are aimed at assessing the type of work in which a candidate shows special interest and involvement. The type of jobs which will be satisfying to the employees can be identified with the help of interest tests.

Question 8.
(a) Mention any five differences between a Commercial Bank and the Central Bank of a country. (5)
(b) Briefly explain any five factors a businessman should keep in mind while selecting a suitable mode of transport. (5)
Answer:
(a) Distinction between the Central and a Commercial Bank : Following are the points of distinction between the Central Bank and a Commercial Bank :

Central Bank	Commercial Bank
(i) Central Bank is the apex bank which supervises and controls the entire banking system of a country.	(i) Commercial Bank is one of the banks in a country.
(ii) It is owned by the Government.	(ii) It is generally, owned by the shareholders.
(iii) Its purpose is to serve the country’s interest.	(iii) Its purpose is to earn profit.
(iv) It is a banker to the Government.	(iv) It is a banker to the general public.
(v) It has the mono-poly over note issue.	(v) It cannot issue notes.
(vi) it is the custodian of foreign exchange reserves of the country.	(vi) It is only an authorised dealer in foreign exchange.
(vii) It controls all other banks.	(vii) It functions under the control of the Central Bank.
(viii) It controls credit in the country.	(viii) It serves as an agent of the Central Bank.
(ix) There is only one Central Bank in a country.	(x) The chief executive of the Central Bank is called ‘Governor’.
(ix) There are several Commercial Banks in a country.	(x) The chief executive of the Commercial Bank is called ‘Chairman’.

(b) In order to select a particular means of transport, the following factors should be taken into consideration by a businessman:

(i) Cost : Water transport is the cheapest means of transport for carrying bulky goods over long distance, particularly when time is not the essential element. Railway ranks second in terms of cost of service. It is cheaper than road transport for heavy goods and long distance movement. However, for small consignments which are to be carried over short distance, road transport is the cheapest. Air transport is the costliest means of transport because its operational cost is too high and its capacity is limited.

(ii) Carrying Capacity : Railways and waterways have larger carrying capacity than other means of transport. They are also cheaper when the whole wagon or vessel is booked for sending the cargo.

(iii) Speed : In respect of speed, air transport gets the first ranking while waterways is the slowest means of transport. Road transport has the merit of being faster than rail transport over short distance only because loading, unloading, assembling and shunting of wagons takes much time. However, for long distances, rail transport is faster than road transport.

(iv) Flexibility of Service : Water, rail and air transports are not flexible as they suffer from the problem of terminal. Goods have to be carried to and from the terminal in case the businessman desires to use any of these means of transport. But road transport is flexible. It covers the maximum areas of .the country and is capable of providing door-to-door service. It carries goods from one businessman to another and this requires loading and unloading only for once. Road transport also acts as a complementary service to the other modes of transport.

(v) Regularity of Service : Rail transport is the most regular service as it follows regular schedules and is generally uninfluenced by weather conditions. Road, water and air transport are greatly influenced by weather conditions. They may have to delay their trips or even cancel them sometimes. The impact of weather on roadways is comparatively less as compared to airways and waterways.

(vi) Safety : Roads are considered the safest means of transport. When the articles to be consigned require delicate handling, it is preferable to use road transport. Rails also provide sufficient safety to goods. They are less prone to accidents as compared to road vehicles. Airways and waterways are the most risky modes of transport.

Question 9.
(a) A well-trained employee is an asset to the enterprise. Mention any five advantages of training. (5)
(b) Explain the following principles of an Insurance contract,
(i) Utmost good faith
(ii) Subrogation (5)
Answer:
(a) A well-trained employee is an asset to the enterprise because of the following advantages of training :

1. Increased Productivity : Training helps to improve the quantity and quality of work performance. Well- trained employees produce more and better goods.
2. Better Utilisation of Resources : By training, employees learn new and better methods of doing jobs. They make better and economical use of materials and machinery. As a result, wastage of resources and cost of production are reduced.
3. Better Safety : Training helps to improve the job knowledge and skills of employees. As a result, the rate of accidents and damage to machinery and equipment are well under control, with minimum occurrence, due to proper handling by well-trained employees.
4. Higher Morale : A good training programme moulds employee attitudes towards work. He can handle job operations competently and in a confident manner. He can produce results and earn the rewards. This atmosphere is psychologically motivated. Moreover, employees who receive training feel that they are being taken care of by the management and this results in raising their morale.
5. Reduced Absenteeism : As trained employees feel more satisfied and interested in jobs, labour absenteeism is reduced.
6. Less Learning Period : A systematic training programme helps to reduce the time and cost required to reach the acceptable level of performance. The employees need not waste time in learning by trial and error or by observing others.

(b) Principles of a Insurance Contract : The principles of insurance are the rules of action or conduct adopted by the stakeholders involved in the insurance business.

Two specific principles of utmost significance to a valid insurance contract are the following:

(i) Utmost good faith : A contract of insurance is a contract of uberrimae fidel i. e., a contract found on utmost good faith. Both the insurer and the insured should display good faith towards each other in regard to the contract. It is the duty of the insured to voluntarily make full, accurate disclosure of all facts, material to the risk being proposed and the insurer to make clear all the terms and conditions in the insurance contract. Any fact, which is likely to affect the mind of a prudent insurer in deciding to accept the proposal of insurance or in fixing the rate of premium is material for this purpose. Failure to make disclosure of material facts by the insured makes the contract of insurance voidable at the discretion of the insurer.

(ii) Subrogation : It refers to the right of the insurer to stand in the place of the insured, after settlement of a claim, as far as the right of insured in respect of recovery from an alternative source is involved. After the insured is compensated for the loss or damage to the property insured by him/her the right of ownership of such property passes on to the insurer. This is because the insured should not be allowed to make any profit, by selling the damaged property or in the case of lost property being recovered.

Question 10.
Prepare Trading, Profit and Loss A/c. and Balance Sheet of M/s. Banerjee Enterprises for the Year ended 31st March, 2010 from the following

Trial Balance as on 31.03.2010

Answer:
Trading Account for the year ending 31st March, 2010

Solving ICSE Class 10 Commercial Applications Previous Year Question Papers ICSE Class 10 Commercial Applications Question Paper 2013 is the best way to boost your preparation for the board exams.

ICSE Class 10 Commercial Applications Question Paper 2013 Solved

Section – A (40 Marks)
(Attempt ALL Questions)

Question 1.
Give one difference between each of the following:
(a) Industrial goods and Consumer goods. [2]
(b) Fixed assets and Current assets. [2]
(c) Sales promotion and Publicity. [2]
(d) Fixed deposit and Recurring deposit. [2]
(e) Direct labour costs and Indirect labour costs. [2]
Answer:
(a) Industrial Goods: It is not directly consumed by the customer, but is used in the production of some other product, e.g., Machine.
Consumer Goods: It is directly consumed by the ultimate consumers, e.g., Soap.

(b) Fixed Asset: Fixed Assets are assets which are acquired to use in the organization for a long period of time to help in the servicing or manufacturing process. The duration of fixed assets is normally more than 5 years. For example : Land and Building, Machinery, Furniture etc.

Current Asset: Current Asset is an asset which can be easily convertible into rupees. It is also used to meet the daily expenditure of the company. The duration of current assets is normally 1 to 2 years. For example : Debtors, Stock, Short term investments etc.

(c) Sales Promotion: It refers to all those activities other than advertising that enhances consumer purchasing activities. These are non-recurring in nature, e.g., Distribution of free samples. Publicity: Publicity means non-personal means of communication which has no sponsor and is not paid by any organisation, e.g., Audio-Video material.

(d) Fixed Deposit: Fixed deposits are made (Single instalment) for a fix period and cannot be withdrawn before the expiry of the period for which they have been deposited. The rate of interest depends upon the period of time.

Recurring Deposit: In this the depositor is required to deposit a fixed amount every month for a fixed period of time.

(e) Direct Labour Costs: Labour which is directly consumed in the process of production. It is also known as productive or operating labour, e.g., Wages.

Indirect Labour Costs: Labour which indirectly helps in the production process, which cannot be easily traced, e.g., Salesman Salary.

Question 2.
(a) What is Food Adulteration? Give an example. [2]
(b) Mention the elements of Public Relations. [2]
(c) Why should an Income and Expenditure Account be prepared? [2]
(d) Give two basic difference between Informative advertising and Persuasive advertising. [2]
(e) What are ‘contingent liabilities’? [2]
Answer:
(a) Food Adulteration: It means deliberate mixing of foreign particles of low quality which are undesirable in the food items, to increase the quantity, e.g., Mixing of stone pieces identical to Wheat, Rice and Pulses.

(b) Public Relation Elements: (1) Human Relation, (2) Empathy, (3) Persuasion, (4) Dialogue.

(c) Income and Expenditure account is prepared to know the surplus or deficit arising from the activities of a non-trading concern during a year.

(d)

Informative Advertising	Persuasive Advertising
1. Informative advertising is commonly used to drive “primary demand” for new product and ser­vice categories.	1. The goal of persuasive advertising is to drive selective demand for specific products or ser­vices.
1.  It is used to empha­size the product name, product benefits and its possible uses to the pro­spective market.	2. It is used after product in­troduction to customers. Its main goal is to en­hance selective demand for the product.

(e) Contingent Liabilities: These are those liabilities which become payable on the happening of an event. Future events may decide whether it is really a liability or not. Due to their uncertainity, these are known as contingent liabilities.
e.g., bills discounted but not matured, guarantee for a loan, financial cases pending etc. These are also known as anticipated liabilities.

Question 3.
(a) On the basis of ownership, distinguish between a Product and a Service. [2]
(b) Explain in brief the term ‘Parity Pricing’. [2]
(c) How does the Central Bank control credit through Statutory Liquidity Ratio. [2]
(d) Explain the terms Surplus and Deficit in an Income and Expenditure Account. [2]
(e) With reference to the Bhopal Gas Tragedy:

1. Name the company responsible for the tragedy.
2. Identify the poisonous gas that caused this ghastly man-made disaster. [2]

Answer:
(a)

Product	Service
1. Ownership of a product is transferable.	1. Ownership of service is not transferable.
2. e.g., When a T.V. is bought, the owner- ship is transferred from the seller to a buyer.	2. e.g., Taking house on a rent, won’t transfer the ownership from the seller to you.

(b) Parity Pricing: Parity Pricing concept states that the selling price of a product or produce should go up in the same account as the pieces of the inputs used in product. It means adjustment of price according to the competitors. It is best suitable for a highly competitive market.

(c) Statutory Liquidity Ratio (SLR): Statutory liquidity ratio refers to the amount that the commercial banks require to maintain in the form of gold or government approved securities before providing credit to the customers. SLR is determined and maintained by the Reserve Bank of India in order to control the expansion of bank credit.

(d) Surplus: If the income of a non-trading concern exceeds over its expenditure, it is known as surplus.
Deficit: If the expenditure exceeds the income, it is known as deficit.

(e)

1. The company responsible for the Bhopal Gas Tragedy – Union Carbide India Limited.
2. Methyl Isocyanate (MIC).

Question 4.
Justify either for or against by giving two reasons for each of the following:
(a) Aggressive selling is the only way a company can survive in a highly competitive market. [2]
(b) Real costs must be recorded in the book of accounts. [2]
(c) Training reduces employee turnover. [2]
(d) Tea and coffee can be sold on sale on approval or return basis. [2]
(e) Increased advertising in recent times has resulted in lower prices of newspapers. [2]
Answer:
(a) For: Yes, it is true because through aggressive selling only you can get more customers to exchange their money for your products and services by proving yourself superior among the competitors. To achieve this, new marketing and selling techniques are used to explore the needs of customers, to get their maximum satisfaction.

(b) Against: Real cost cannot be recorded in the books of accounts because value of this cannot be measured in terms of money. It means sacrifice, discomfort and pain involved in doing the business.

(c) For : Yes, training reduces employee turnover as it increases the efficiency of worker which boosts the morale of the employees. This ensures employee loyalty, long term growth and a lifetime association with the organisation.

(d) Against: Tea and coffee cannot be sold or sale on approval or return basis because under this arrangement of sale an individual or a company interested in purchasing a specific item is allowed to use the item for a given length of time. At the end of that time if the individual is satisfied with the item they agree to purchase otherwise it has to be returned, but in the case of tea and coffee nothing could be returned, after the consumption (if not satisfied) and if, consumed partially it will be difficult to do the valuation of the consumed portion.

(e) For: Yes, increased advertising in recent times has resulted in lower prices of newspapers, as now a days advertising has become a great source of income for newspapers which has resulted in increase in its circulation.

Section – B (60 Marks)
(Attempt any FOUR Question)

Question 5.
(a) What are Overhead or Indirect expenses? Mention three types of Overhead with an example of each. [5]
(b) ‘Intense competition in the corporate world has led to the emergence of advertising as a vital toolfor corporate survival ’. Do you agree with this statement? Support your answer by citing reasons. [5]
(c) Explain the following:
(i) Principle of Prudence.
(ii) Money Measurement Concept. [5]
Answer:
(a) Overhead or indirect expenses are those expenses which cannot be charged to production directly or cannot be identified with a specific product or job. These are needed to conduct business. These are incurred in planning and controlling the business operations. Three types of overhead expenses are:

1. Factory Overhead : Consumable stores like Lubricants, Grease etc. used for the smooth working of machines.
2. Office Overhead: These expenses are incurred in the process of managing business activities e.g., office rent, salary of office manager etc.
3. Selling Overhead : These expenses are incurred in selling and distribution of goods and services, e.g., advertising expenses, sales commission, packing expenses etc.

(b) Intense competition in the corporate world has led to the emergence of advertising as a vital tool for corporate survival because these days, there are several producers producing similar products, therefore the primary objective of advertising is to provide relevant information to the consumers about products and services.

It also provides link between producers and consumers. With the help of convincing advertisement, a business firm can create demand for its products which facilitates mass distribution of goods. By creating brand loyalty, advertising helps to maintain sales and market-share.

(c)
(i) Principle of Prudence: According to this convention all anticipated losses should be recorded in the books of accounts, but all anticipated or unrealized gains should be ignored, e.g., Joint Life Insurance Policy is shown only at surrender value as against the amount paid.

(ii) Money Measurement Concept: According to this principle only those transactions can be recorded in the books of accounts, value of which can be measured in the terms of money. This makes accounting records relevant, simple and easy to understand. For example, A firm has 20 chairs, 5 tons of raw materials and 3 machines. This information is not much meaningful to keep systematic records. If one says that a firm has chairs worth ₹ 6,000, raw materials worth ₹ 10,000 and machines worth ₹ 60,000, it is more meaningful information to keep proper records.

Question 6.
(a) What is the Penetrating Pricing Policy? Discuss its pros and cons. [5]
(b) Elucidate the selection procedure for a vacancy in an organization.  [5]
(c) Briefly explain any five Consumer Rights.  [5]
Answer:
(a) Penetrating Pricing Policy : According to this pricing policy, in the initial stage low prices are set-up to make to particular brand popular. This strategy is mostly used when there is strong potential competition in market and while launching fast moving consumer goods where demand is highly elastic and to restrict the entry of new competitors in the market. But at the same time the demand goes so high that it becomes difficult for the producer to meet it or the consumers think that the low price product are low in quality.

(b) Selection Procedure :
(i) Preliminary Interview : This is the first step in the process of selection which is conducted to know the minimum qualification, experience and age of the candidates.

(ii) Application Form : After qualifying preliminary interview the candidates are asked to fill in the prescribed application form to get the written details of the candidates including his age, sex, address etc.

(iii) Employment Test: This is conducted to check the required skills in the candidates. These tests are based on the assumption that work behaviour of a persons can be predicted by sampling it.

(iv) Selection Interview : It is a method of checking the information obtained through application and employment test, through face to face communication with the candidates. It also helps the candidate to acquire knowledge about the job details and the company.

(v) Checking References: It is the process of verifying the names given by the candidate, of the people who knows about him, his previous job and his character. To obtain this information, the employer may also contact friends of the candidate, his past and present employees.

(vi) Medical Determination and Final Approval : A medical test is conducted to ensure the physical fitness of the candidates which leads to the final approval. There are three aims of medical examination
(a) Physical fitness for the job concerned
(b) to protect organisation from infectious disease
(c) to check exercise expenditure on the treatment of employees. The finally approved candidate are issued appointment letters.

(vii) Final Approval: The candidates who are short listed after medical examination are finally approved by the head of the department in which they are to work. They are issued appointment letters and/or service agreement are made with them.

(c) Consumer Rights :

1. The Right of Safety : This right protects the consumers against the sale of goods which are hazardous to life and property.
   e.g., Electrical appliances, Gas cylinders, sub-standard drugs etc. Consumers must have assurance regarding qualify, reliability and safety of the products.
2. The Right to be informed : The consumer must have the right to be informed about the full details of the product regarding its quality, price, date of manufacture etc. This protects the consumers from deceptive advertising, inflated price etc.
3. The Right to Choose : According to this right the consumer should be free to choose from alternative products, through free competition.
4. The Right to be heard : The consumer is free to register his complaint regarding the product at appropriate forums.
5. The Right to Consumer Education : According to this right, the consumer should be made aware of his rights and remedies available under the law.

Question 7.
(a) Describe the procedure adopted for opening a Saving Bank Account with a Commercial Bank. [5]
(b) Briefly explain any five factors responsible for the destruction of the ecosystem. [5]
(c) List the advantages and disadvantages of using radio services as a form of advertising media. [5]
Answer:
(a) Procedure for Opening a Saving Bank Account:
(i) Application in the Prescribed Form :
These forms are provided by banks for opening different types of accounts. In these the person willing to open an account should furnish full details about his name, occupation, permanent and official address, specimen signature etc.

(ii) Introduction of the Applicant:
Introduction of the applicant by an existing account holder in the bank to ensure the identity of the applicant. Existing account holder needs to sign the application form itself and to write his full name.

(iii) Specimen Signature :
After filling the prescribed form issued by the bank and introduction given by a current account holder, the applicant is required to give his four signatures on a prescribed card. This enables the bank to verify the signature of the account holder with the signature on the cheque issued by him.

(iv) Photograph :
In order to avoid various frauds due to fake identity the banks require photographs of the applicant to be affixed on signature card.

(v) Initial Deposit:
It is the minimum amount which the applicant must deposit, to activate his newly opened account. After opening an account, the bank provides the passbook, chequebook and pay-in-slips to account holder.

(b) Five Factors Responsible for the Destruction of the Eco System are as follow :
(i) Population Growth :
Population is growing rapidly but the land is static, which is a great threat to our eco system. This is resulting in deforestation, destruction of natural resources, soil erosion, falling water table, pollution of water sources and atmosphere.

(ii) Transport :
More and more road network is being expanded, which is resulting in deforestation, extinction of species, urbanisation etc.

(iii) Tourism :
With the development of tourism, there is a quest to earn more and more revenue and foreign currency. The virgin areas which are rich in natural resources are exposed for the tourists. This is causing a loss of fresh water and habitats.

(iv) Agriculture:
In order to cater the needs of over growing population, our farmers are using more and more chemical fertilizers and pesticides to increase their productivity. This is resulting into degradation of soil quality and natural food chain process.

(v) Industrialization :
Increase in the number of industries is a great danger to our eco system. It is resulting into deforestation to get more and more land for industries, contamination of water by industrial wastes, air pollution and sound pollution.

(c) Advantages of Radio Services in the form of Advertising Media.

1. It is convenient for the masses due to its wide coverage.
2. It is good for rural areas as it can even cover illiterate people and lower income segment.
3. The frequency of repetition of advertisement is more.
4. People don’t have to sit and watch the advertisement, they can very easily hear them while working.
5. With the use of extra audio affects, in the form of music and interactive sessions through phone calls, makes the communication more effective.

Disadvantages

1. There is a lack of selectivity due to availability of selective radio channels in our country.
2. It is costlier due to limited selectivity.
3. Industrialization and other factors makes the sound signal weak which results in poor reception.
4. It has a short life span and back reference is not possible.
5. It takes visual impact.

Question 8.
(a) What is the professional and social significance of Human Resource Management ? [5]
(b) Write short notes on:

1. Importance of Packaging.
2. The Chernobyl disaster. [5]

(c) Last year, Sakona Co. Ltd. came up with a unique and revolutionary Home Theatre System with amazing new features, excellent sound quality and elegant design. It was priced very high, yet it was a great success. This year, the company is facing stiff competition, but is determined to acquire a huge chunk of the market share.

1. In what stage ofPLC (Product Life Cycle) is the Home Theatre System presently?
2. Suggest strategies that Sakona Co. Ltd. should adopt to achieve its corporate goals. [5]

Answer:
(a) Professional and Social Importance of Human Resource Management
(i) Professional Significance : Human Resource Management helps in maximising the working potential of the employees by providing a healthy working environment and opportunities for growth.

It enhances better understanding among the people working together which leads to effective.team work. It boosts the confidence of the people by placing them at the right place at the right time according to their qualification and work experience. HRM also inculcates a feeling of belonging for the organisation.

(ii) Social Significance: Human Resource Management helps the society by utilising and channelising the manpower in the productive channels. It provides maximum opportunities to enhance the dignity of labour by placing the right person at the right job. HRM also raises the standard of living of the people by increasing the employment opportunities.

(b) (i) Packaging: It means placing products in suitable packages for safe and easy handling. It is not only a protective cover but it also acts as a silent salesman by providing various information about the product. Packaging also provides reuse, repack and resale value of the packaging material which adds utility to the product. It also has a competitive value as it differentiates a product from its substitutes and adds beauty to the product to grab immediate attention. Packaging simplifies the work of sales promotion and it is also helpful in creating product differentiation.

(ii) The Chernobyl Disaster : The Chernobyl disaster occurred on April 26,1986 at Chernobyl nuclear plant located in Chernobyl city of Ukraine. It is a nuclear power generation station from where radioactive material drifted over the surrounding area causing more than 10,000 people died due to side effect of radiation. It lead to series of genetic disorders or changes in the areas of Ukraine, Belrus and Russia.

(c)

1. At present the PLC of the Home Theatre System is in its growth stage where it is facing a tough competition. Still the sale at distribution is widening.
2. At this stage the Sakona Co. Ltd. should adopt the following strategies:
   (a) Keep the price at competitive level.
   (b) More importance should be given to after sales service.
   (c) Try to introduce more versions of the Home Theatre System with improved features.
   (d) More advertising to be done to create brand image and more sales promotional activities to be introduced.

Question 9.
CASE STUDY
It is the convection ofthe management of Carmel Closure Co. Ltd. that its shareholders constitute an important part of the public. The management feels that the company should devote time and effort in studying the make-up, location, economic statues and demography of this group to enable better communication and a stronger public relation policy.
Mr. Ramesh Sharma is the Public Relation Officer of the company. He agrees with the Management to a certain extent, however he would like to introduce other forms of public relations programmes.
(a) Why is it imperative for a company to maintain a good relationship with its shareholders? How should Mr. Sharma go about planning a successful programme? [5]
(b) Mention two other public relations programmes that would be of paramount importance to the company. Give reasons to support your answer. [5]
(c) How would you explain to Mr. Sharma about the element ‘Empathy’ as being one of the key elements to establish good public relations? [5]
Answer:
(a) It is important for a company to maintain a good relationship with its shareholders because they are the one who contributes to the company’s share capital and assure the risk of the loss. The company should consider the shareholder as its actual owner and should always strive for a better relationship with its shareholders to hold their interest in the company and promote holding of stock as a long term investment.

Mr. Sharma should provide the current information about the financial position and future prospects of the company in a simple and understandable language. The company should organise shareholder relation programmes to promote the long-term investment relationship with the company. This will reduce the dissatisfaction and organised opposition to management policies.

(b ) The two public relation programmes that would paramount importance to the company are:
(i) The importance should be given to good employee relations, by giving equal opportunities to the employees and to be a part of management. This will increase the adaptability of management policies more effectively. A two way channel of communication should always be active between management and workers.

(ii) Consumer decides the success or failure of a business enterprise. Therefore, a sincere concern for consumers is very important. This can be easily achieved by developing better relations with consumers by regularly communicating with them through sales representatives, meetings, surveys, mailings, magazines and literature.

(c) Empathy means looking at things from others point of view which leads towards better understanding of another human being. It is basically concerned with the establishment of trust and rapport, which is the base for public relation. It involves seeing and feeling matters as others see and feel which builds more confidence of the public and promotes goodwill of the company. It also appreciates company’s perspective in a positive way by creating an atmosphere full of faith, trust and confidence.

Question 10.
CASE STUDY
Ardent Aptec Ltd. is a telecommunication company. It gives top priority to employee training. The company believes that training contributes to a permanent relationship between superiors and subordinates. The company environment provides conditions favourable to learning and career growth. It also considers it as a continuous process.

The recruitment policy of the company is focused on campus recruitment and hence special steps are taken to ensure that the employees acquire the necessary skills. The accelerated rated of technological changes in the telecommunication industry has led to greater focus on retraining employees.

In addition to in-house training facilities, the company makes use of training programmes run by various technical and management institutes.
(a) Discuss any three types of training that can be undertaken by Ardent Aptec Ltd. [5]
(b) Why does Ardent Aptec Ltd. think it is important to train employees? [5]
(c) Discuss any three training methods that may be adopted by Ardent Aptec Ltd. [5]
Answer:
(a) The three types of training that can be undertaken by Ardent Aptec Ltd. are as follows:
(i) Coaching :
Under this method of training, the employees gets instructions by the supervisors or by some experienced employee. This method of training is economical, more realistic, does not require any separate training department and it creates better understanding between the workers and their supervisors.

(ii) Lectures, Seminars and Conferences :
Employees learn new ideas and latest changes taking place in the technology by attending lectures, seminars and conferences. This refresh their knowledge and they learn new ideas.

(iii) Job Rotation :
In this method the trainee is periodically rotated from one job to another. This broadens the outlook of the employees, by making him learn a variety of tasks. Initially, trainee is appointed in one department, say production department. When he comes to know each and everything of that department, he is transferred to another department, say, marketing department. Later on, he is sent to other departments.

(b) Ardent Aptec. Ltd. thinks training is very important because training is a learning experience which develops manpower to improve their job performance. It also helps workers to cope with the latest technological advancement taking place rapidly which boosts the morale of the workers to face the complex situations at the work place. Well trained employees require less supervision which reduces the cost of supervision and increase the probability of expansion of work.

(c) Three training methods that may be adopted by Ardent Aptec Ltd. are:
(i) Lectures, Seminars and Conferences:
Under such training method the employees leam new ideas and latest technological developments taking place in the industry. It refreshes their knowledge with new ideas.

(ii) Vestibule Training:
This training is conducted away from the actual work place. In this type of training, trainees leam on the equipments they will be using. Artificial working environment is created where the employees recover from their initial nervousness before going into an actual work place. This type of training permits greater emphasis on teaching the best method of work.

(iii) Sensitivity Training :
This method helps the employees to leam more about themselves, their weaknesses and to develop self awareness. It also helps in promoting team spirit among the workers.

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[Section – A (40 Marks)]
(Attempt all questions from this section)

Question 1.
(a) Define a colour wheel. [2]
Answer:
The circle containing twelve colours i.e., three primary, three secondary and six tertiary colours is called the “colour wheel”.

(b) State any two ways of taking care of carpets. [2]
Answer:

• Carpets should not be turned or folded.
• It should be lightly cleaned.
• Never drag any furniture over the carpet. It will damage the carpet.

(c) Why is Ecotone so popular these days ? [2]
Answer:
An Ecotone describes an area that acts as a transition ‘ or boundary between two ecosystems. An Ecotone can
be formed naturally – through abiotic factors such as changes in soil composition – but can also be created through the result of human interaction.

Ecotone can act as a “buffer-zone” protecting the neighbouring ecosystem from possible environmental damage i.e., a wetland area could absorb pollutants preventing them from seeping into a river or estuary.

(d) List two factors that influence the size of the kitchen. [2]
Answer:
This is an important consideration which should always be in your mind while planning for a kitchen. A kitchen should always be large such that at a time two or three persons can work. Size of the kitchen should be such enough that you can put all your accessories in the kitchen like as refrigerator, oven and other storage.

(e) Name any two types of family budget. [2]
Answer:
1. Surplus Budget : These are those families whose income is more than expenditure can save extra amount of money.

2. Balanced Budget : Those families whose income and expenditure are almost the same. They hardly have any money to save.

Question 2.
(a) State any two objectives of savings. [2]
Answer:

• It reduces economic insecurity especially in old age after retirement.
• Useful during an emergency i.e., Loss of job, accident, and any other natural calamities.
• Also useful for children’s education, marriage, etc.

(b) What do you mean by endorsement of a cheque? [2]
Answer:
Endorsement means transferring your ownership to another person by signing on the back of a negotiable instrument (say a cheque).

(c) Give the full form of ATM and PIN. [2]
Answer:
ATM: Automated Teller Machine
PIN: Personal Identification Number

(d) What are endocrine glands ? [2]
Answer:
The endocrine system is made up of glands which regulate and secrete hormones. Endocrine glands are also known as ductless glands because these have not special ducts.

(e) State any two factors affecting the physical development of a child. [2]
Answer:
Factors affecting physical development of a child :

• Good nutritive food
• Proper exercise
• Behaviour of the family

Question 3.
(a) What do you mean by a food group ? [2]
Answer:
Food Groups: It is a collection of varieties of foods which share similar nutritial properties on the food grouping, food items are generally classified on the basis of their nutrients.

(b) Name any two adolescent eating disorders. [2]
Answer:
Eating disorders in adolescence : Bulimia nervosa and Anorexia nervosa are the two eating disorders observed during adolescence.

(c) List any two factors as to why breakfast is considered the most important meal of the day. [2]
Answer:
Breakfast is considered as the most essential part of our diet. In a breakfast, we should include some protein food like milk, eggs, bread etc. For the children and teenager milk is very much essential. Breakfast provide us one-fourth of daily calories and proteins which are required by our body and it is very much essential for maintaining a better performance and a better efficiency. In general, we can say that breakfast provide us the capacity or the energy to start our day with a smiling face.

(d) Why should ripe bananas not be stored in the refrigerator? [2]
Answer:
Bananas grow in hot climates, so they are unused to the cold. If they’re kept at a cold temperature, the enzymes that enable them to ripen are inhibited. And as those enzymes become inactive, other enzymes operate more efficiently. Some cause cell damage, while others (browning enzymes) cause the skin to blacken.

(e) State any two factors causing food spoilage. [2]
Answer:

• Air and Oxygen: One important cause of food spoilage is air and oxygen.
• Light: Almost all foods are exposed to light from natural and/or artificial sources.
• Microbial Growth: Microorganisms, specifically bacteria, mould and yeasts, can cause food to spoilage.
• Temperature.

Question 4.
(a) Suggest any two points to be considered while storing clothes. [2]
Answer:
Storage of clothes :

• Cotton clothes:
  • Do not store moist clothes, they invite fungus.
  • Put some deodorant among the stored clothing to avoid the smell, (musty)
• Silk clothes:
  • Store dry clothing only.
  • Avoid use of mothballs because they reduce the lustre of zari.
• Wool clothes:
  • Store totally dry woollens.
  • Use neem leaves, nephtha balls to prevent the damage by moths.

(b) Name the method of washing rayon fabrics. [2]
Answer:
Mild soap can be used on rayon fabrics. Always use kneading and squeezing method for washing these fabrics. The more dirty spots should be cleaned with gentle rubbing by flat hand.

(c) What is a standardization mark ? [2]
Answer:
Standardization Mark : A standardization mark is a mark given to a product which meets certain standards with respect to the quality of the product in terms of material used, method of manufacture, labelling, packaging sale and performance.
Or
It indicates to a buyer that the product has been tested and found to be of good quality. Few marks are : ISI, FPO, AGMARK etc.

(d) List any two conditions when food is considered to be adulterated. [2]
Answer:
Food is considered to be adulterated if:

• any inferior or cheaper substance has been substituted.
• the article contains any poisonous or other ingredient which render it injurious to health.
• Any colouring material other than that prescribed is present in the article.
• the article contains any prohibited preservative or permitted preservative in excess of the prescribed limits.

(e) Define the term consumer. [2]
Answer:
Consumer: A consumer is an individual who purchases / uses / consumes services, items / products to satisfy wants.
Or
Consumer is a person who buy goods or pays for services that he needs from the market.

Section – B (60 Marks)
(Attempt any four questions from this section)

Question 5.
Home furnishing requires aesthetic taste and knowledge.
In this context, explain the following:
(a) Three dimensions of colour. [5]
Answer:
Three dimensions of colour : The three dimensions of colour are basically value, hue and intensity.
1. Value : A colour’s lightness and darkness is known as value. On the colour wheel, the basic colours can be lightened to pale tints and darkened to nearly black shades. Basically, there are total nine value steps.

2. Hue: It is simply the colour quality that has been given a technical name for its identification.

3. Intensity: It refer to the brightness and dullness of a colour.

(b) Factors affecting the selection of curtains and draperies [5]
Answer:
While choosing curtains for the home, the following factors should always be kept in mind :

• If you have small rooms, it can also give the effect of being large if curtain blend with walls.
• You should use plain curtains in those room which have more patterns. Plain curtain can also be used in those rooms which contains pictures and also have pattern in furniture.
• If there are too many windows in a room, the pattern of curtains should be less striking. Bold prints provide a masculine look while small patterns gives a feminine look.

(c) Important features and characteristics of flooring in a kitchen. [5]
Answer:
Importance of the flooring in a kitchen : A well maintained floor is necessary for a kitchen. Floor should be dust free means should not be kutcha. Because if the floor is kutcha (temporary) dust particles can make the food dirty and unhygienic. Proper tiles should be placed in the kitchen. Floor surface should be clean and easy to maintain. Floor should not be too slippery.

In the simple words we can say a kitchen floor should be made-up of such materials which are easy to clean and maintain.

Question 6.
Budgeting is an art of planning income so that some money is left aside for saving. In this context, explain:
(a) Five advantages of making a budget. [5]
Answer:
Advantages of Budget:
The following are the advantages of making a budget:

• The budget helps in saving money for unforeseen emergencies.
• It helps in distribution and proper allocation of income for expenditure or different items, according to their requirements.
• It helps the family in spending the money carefully so that the expenditure does not exceed the income.
• It act as a financial guide.
• Since all the members in a family work together for the planning of a budget, it induces a sense of cooperation among them.

(b) The utility of a passbook and paying-in-slip book in the operation of a bank account. [5]
Answer:
1. Utility of a Passbook : The passbook is a copy of the customer’s account in the bank’s Ledger as on a particular date. It shows credit for deposits and debit for withdrawals, and the balance. At the end of every month, the depositor sends his passbook to the bank for updating entries of transactions.

2. Utility of Paying-in-SIip : This book contains a number of printed slips with perforated counterfoils. It is used while depositing cash or cheque in the bank. The depositor fills in all the particulars and handover this slip to the cashier alongwith cash or cheque. The cashier checks the details and counts the money. He then puts the stamp on the paying-in¬slip and the counterfoil and initial them. The main slip is retained and the counterfoil is returned to the depositor duly signed by the manager / cashier of the bank.

(c) How does a recurring account help common people to save money ? [5]
Answer:
Recurring Deposit Account: It is started to encourage those people who cannot make large deposit in lumpsum. Recurring deposit can be opened with small amount over a specified period, the depositor keeps on depositing a specified sum of money every month. The number of monthly installments may be 12, 24, 36, 48, 60 and so on. After the expiry of the period, the depositor gets back his money alongwith interest accruing on such deposits.

A Pass Book is issued to the depositor, showing the installments deposited by him from time to time. Cheques cannot be drawn to withdraw money from a recurring deposit account. The amount can be withdrawn only on closure of the Recurring Deposit Account. If amount is withdrawn before expiry of the specified period, the rate of interest paid by bank is lower, to the level of interest payable on savings account.

Question 7.
Adolescence is a crucial stage in every individual life.
In this context explain:
(a) Measures to be adopted to prevent body odour. [5]
Answer:
Measures to prevent body odour: To avoid the body odour following measure should be done :

• Wear clean and cotton undergarments to prevent excessive sweating.
• Clean the area around your private parts with anti-bacterial soap.
• Regularly take bath twicely.
• Drink plenty of water.
• You can also use the perfumes or deos. But these are the artificial method. It does not clean your body. It only supress the bad odour. Regular bathing is the best measure to prevent body odour.

(b) Importance of exercise in an adolescent’s life. [5]
Answer:
Physical exercise is considered important for maintaining physical fitness and maintaining healthy bones, muscles and joints. Frequent and regular physical exercise is an important component in the prevention of some of the diseases such as heart diseases, cancer, obesity and back pain.

By staying physically active, teenagers can reduce the risk of stress, depression and other mental health issues. Physical activity can also help teenagers maintain a positive body image because physical activity is so beneficial to human body.

Exercising bums calories, helping teenagers avoid weight gain and develop lean toned physiques. Maintaining a healthy weight reduces the risk of diseases such as type II diabetes and high blood pressure, which are becoming more prevalent among teens.

(c) The role of parents in helping an adolescent to deal with emotional problems. [5]
Answer:
Role of Parents : As we know that Adolescence is a crucial stage in every individual life. During the phase of adolescence, the adolescents want independence from their parents and yet they are dependent on them for their needs. They do not like to be old. ‘Do this’ and ‘Don’t do this’. Parents still want to control them while adolescents wants freedom and this leads to a tussle between their relationships. Here, parents have to learn to ‘Let go’, not of the relationship, but of their dreams, and their authority over the young people, so that they may allow a young person to develop their own dreams and greater self-responsibility.

Question 8.
Laundering is a combination of cleaning and finishing.
In this context explain :
(a) How do you wash a school woolen cardigan? [5]
Answer:
Laundry procedure of all clothes are approximately same. These are the steps which we use in laundering a woollen cardigan.

• Preparation: Firstly, examine the cardigan for tears, holes and stains and treat accordingly. Trace the outline on a brown paper to ensure its shape after washing.
• Steeping: In case of very dirty cardigan, it should not be soaked for more than 5-10 minutes in cold water. Luke warm water will harm the cardigan.
• Washing: Wash the cardigan with a very gentle hand with tender kneading and squeezing method.
• Rinsing: Remove the extra soap by pressing it between flat palms and then rinse off several times in a plenty of water.
• Drying: Roll it tightly in a towel to remove the extra water. Spread flat within the outline marked for its original shape. Dry it in shade.
• Ironing/Press: Cardigan should not be ironed. If required, it must be pressed.

(b) The importance of starches and blueing agents in laundry. [5]
Answer:
Starching : It is done to make the fabric stiffen and give a feel which makes it attractive. This is mostly done by the textile manufacturers. It is an effort to regain the original finish of the fabric.
Blueing: It is applied on the white fabrics. Both these process are done in a single step to save time and starch.

(c) Detergents are better than soaps in laundry work. [5]
Answer:
Advantages of detergents over soaps :

•  Detergents can be used with hard water also whereas soaps cannot be used.
• Detergents do not require vegetable oils or fats for their preparation, thus they help in saving fats and oils for human consumption.
• Detergents can even be used with acidic water whereas soaps cannot be used.
• Detergents are more soluble and have better cleansing action than soaps.

Question 9.
Meal planning is both an art and science.
In this context explain:
(a) Five factors affecting meal planning. [5]
Answer:
Factors affecting meal planning : There are many factors that affect meal planning. It is easy to plan meals for an individual than for a family. Because the needs of family members differ considerably.
Meal planning is greatly influenced by factors like age, sex, occupation, likes and dislikes etc.

1. Age : Age is the major factor that affect the meal planning process in a greater way. A child, adult, old, adolescence, these all age groups have a different requirement.

2. Sex : Men and boys in general eat more than women and girls. This difference is due to men/boys having higher metabolic rate than women/girls.

3. Physical needs : There are members of different ages and occupations in a family and naturally there is difference in their nutritional requirements. So, nutritional requirements must be kept in mind while meal planning.

(b) The need for adequate nutrition by the elderly. [5]
Answer:
Need for adequate nutrition by the elderly: Adequate nutrition and a balanced diet is essential in the old age to prevent and control hazards and bad effects of ageing. Obesity, diabetes, constipations, cardiovascular diseases are the major diseases in old ages.

Hence, good nutrition is very important during old age. Special care should be taken that the diets of the elderly are nutritionally adequate and well balanced. You should know or have the knowledge that the elder people require less calories. Few factors always be kept in mind while you are planning balanced diet for the elder people.

• Provide them liberal amounts of food products like as milk, fresh fruits, green vegetables. These kind of food provide them vitamin and other minerals.
• Adequate consumption of calcium, should be ensured to make the bones strong in old age too.
• Scientists also gave emphasis on the importance of water in the diet of the elder persons for the better functioning of kidneys.
• The diet should be soft and well cooked and it should also include those foods which need a little or no mestication. Because at old age maximum people loss their teeth. So they need soft food.
• Intake of sweets, fried, high fat foods should be reduced at minimum. Because the elder people feels difficulty to digest such kind of food.

(c) Importance of food preservation. [5]
Answer:
Importance of Food Preservation : Food production and supply does not always tally with the demand or meets of the people. In some places there is surplus production of a food product, whereas in some other place there is inadequate supply. Even foods are perishable and semi-perishable like juicy fruits, vegetables, mangoes, tomato, papaya and many more, which very quickly gets spoilt. It is therefore important to improve and expand facilities for storage and preservation of food.

Food preservation helps in:

• It increases the self-life of foods thus increasing the supply.
• Making the seasonal food available throughout the year.
• Adding variety to the diet.
• Saving time by reducing preparation time and energy, as the food has processed.
• Stabilising prices of food, as there is less scope of shortage of supply to demand.
• Decreasing wastage Of food by preventing decay or spoilage of food.
• Improving the nutrition of the population. Preserved foods help people to bring a variety in the diet, thereby decreasing nutritional inadequacies.

Question 10.
Consumer education helps a consumer in making sensible purchases.
In this context explain :
(a) The objectives of consumer education. [5]
Answer:
Objective of Consumer Education : Consumer education mainly aims at making consumers aware about what, where, when, how and how much to buy. It develops critical awareness and living skills which are oriented towards building a better future for all. Consumer education assists the buyer in wise selection of goods to meet family requirements.
Consumer education is extremely important for every individual. This awareness safeguards the Consumer interests for better living.

Consumer education enables an individual to:

• Have proper knowledge and information as regards the items/services needed in day-to-day life.
• Make better use of their money thus improving the standard of living.
• Make intelligent choices and be better prepared for everyday living.
• Derive maximum satisfaction from the product or item or service used.

(b) Health hazards due to the consumption of argemone seeds. [5]
Answer:
Argemone seeds are the most common adulterant used in the present days. These seeds are obtained from Argemone maxicans. These seeds are closely resembles with the mustard seeds. Little tail at one end is the difference between the both. Regular consumption of its oil results in the epidemic dropsy. Collection of watery fluid in the tissue of the body mainly causes swelling. Other effects are gastro-intestinal disturbance, irregular fever with rashes and many others.

(c) Wise buying techniques made by the consumer. [5]
Answer:
Wise Buying Decision :
Consumers are faced with purchase decisions nearly every day. Some decisions are more complex than others and thus require more efforts by the consumer. Good planning helps to avoid buying unnecessary items. Also decide the quantity of the items to be bought. This helps to avoid wastage. Check the plan for realism. Evaluate the products by looking at products price, brand, label, quality marks, net weight, contents/ingredients. This will help the consumer to buy good quality food at a cheaper rate.

1. What to Buy: A family should be decided of its requirements and buy just as much as is needed. Size of the family will decide this factor.

2. When to Buy: Having decided what to buy a family has also to determine when to buy. It indicates the time of buying that changes according to the work habits of different people. Time of buying will also be determined by what is to be bought.

3. Where to Buy: It indicates the decision about the market or shop of purchase. Keeping to one store is better, especially in the case of food stuffs. Items of daily use are best bought through cooperatives or nearby stores because items are cheap, and of good quality. If large quantities of items are required, one should go to whole sale shops because they are not only cheaper than retail shops but also superior in quality. Always shop at the stores that are reliable and sale good quality products.

4. How to Buy: A decision has to be taken regarding the method of payment i.e., whether to pay in cash or credit. Compared to credit, cash payment is always better.

5. How much to Buy : It indicates the amount of items to be purchased. A consumer should buy fresh foods according to the quantity one can use daily.

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Section – A (40 Marks)
(Attempt ALL Questions)

Question 1.
Give one difference between each of the following:
(a) Multi-level marketing and Tele-shopping.  [2]
(b) Implicit costs and Explicit costs. [2]
(c) Cash credit and Overdraft. [2]
(d) Book Keeping and Accounting. [2]
(e) Institutional and Informative advertising. [2]
Answer:
(a) Multi-level Marketing (MLM): Multi-level Marketing is a marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of others they recruit, creating a downline of distributors and a hierarchy of multiple levels of compensation.

They are awarded a commission based upon the volume of product sold through their own sales effort as well as that of their down line organization. Tele shopping : Teleshopping refers to the electronic retailing / home shopping channels industry which allow consumers to shop for goods and services from the privacy of their own home. For example, HSN, Shop NBC, Buy. com, Amazon.com, etc.

(b) Implicit Cost: Implicit costs are the costs of self-owned and self-supplied factors of production. For example, the owner of a firm may himself act as its manager. Implicit costs are generally not recorded in the firm’s books of accounts.

Explicit cost: Explicit costs are the contractual money payments actually made to the owners of various factors of production. For example, the firm obtains land on lease and pays rent to the landlord. Explicit costs are recorded in the firm’s books of accounts.

(c) Cash Credit: This is an arrangement where in a bank advances cash loans to the borrower against some tangible security or personal guarantee. The borrower can withdraw upto his cash credit limit according to his needs and can deposit back any surplus. Interest is charged on the amount actually withdrawn by the borrower and not on the whole amount granted.

Overdraft: This is an arrangement under which a current account holder is allowed to withdraw more than the balance to his credit upto the specified limit. Interest is charged on the money actually overdrawn during that period. Commercial banks provide overdraft facility on the security of some assets or on the personal security of the account holder.

(d) Book-keeping : Book-keeping is a narrow term. It is concerned with identifying financial transactions; measuring them in money terms; recording and classifying them.
Accounting : Accounting is a wide term. It is concerned with summarising and analysing the recorded transactions, interpreting them and communicating the results.

(e) Institutional Advertising: It is also known as corporate advertising, it is a tool available with institutions and corporate bodies for creating, promoting and sustaining the prestige or image of the organisation as a whole. For example, the corporate campaigns launched by the Tata, ITC, Reliance, Bata or Philips emphasize the quality and research behind their products.

Informative Advertising : Informative advertising contains information about a product/service or institution. It makes consumers aware of the existence, features, uses of goods and services.

Question 2.
(a) Give two conditions under which parity pricing is desirable. [2]
(b) Briefly describe how advertising sustains the press. [2]
(c) List any two uses of a Balance Sheet. [2]
(d) State any two merits of external recruitment. [2]
(e) Mention any two characteristics of public relations. [2]
Answer:
(a) Conditions under which parity pricing is desirable:

1. When costs measuring is difficult, parity pricing is done under rational pricing strategy.
2. When price charged by the market leader is well established. In an oligopolistic market, charging lower than market leader leads to price war.
3. When the competition is tough and products are homogeneous.

(b) Advertising serves as a great source of revenue for the press (newspapers and magazines). As a result, public can get newspapers and magazines at very low prices. Without advertisements, the cost of production of magazines, etc., will be very high and so sales will be low. This is how advertising sustains press.

(c) A balance sheet has the following uses:

1. It reveals the position of assets and liabilities of the organisation on a particular date.
2. It also discloses the proprietory interest of owner.
3. It reflects the financial position (short and long-run) of the enterprise.
4. It provides sufficient information for calculation of shortterm and long-term financial ratios.

(d) Merits of External Recruitment are as follows:

1. Wide Options : External sources bring in a large number of applicants. This will permit the enterprise to have a free hand in making the selection.
2. Infusion of New Blood : The enterprise can expect to get fresh, talented candidates from outside. This means infusion of new ideas into the enterprise.
3. Element of Competition : Internal candidates have to compete with outside candidates for the vacancies. This is a healthy feature from the point of view of the enterprise.

(e) Characteristics of public relations are as follows:

1. Public relations is a planned and sustained effort. It is a management function.
2. It builds good image of the organisation.
3. Public relations function seeks to ensure that the policies, procedures and actions of the organisations are in the public interest and socially responsible.
4. It creates and maintains harmonious relation between an organisation and the public.

Question 3.
(a) What is meant by premium offer as one of the Sales Promotion techniques? [2]
(b) Give two differences between the Production oriented stage and the Product oriented stage of marketing. [2]
(c) What are the components of Price Mix? [2]
(d) Explain any two themes or values of a good advertisement. [2]
(e) List any two circumstances under which a bank can refuse payment of a cheque. [2]
Answer:
(a) Premium or Bonus Offer: It implies an offer of a certain quantity of the product, free of cost, on the purchase of a specified quantity of the product. It also refers to a free gift on the purchase of specified products.
A premium offer can be of three types:

1. With-pack premium
2. A reusable container
3. A free-in-the-mail premium

(b) Marketing that we see today has not been the same from the very beginning. It has passed through various stages before reaching its modem stage. We discuss the difference between the two earlier stages, i.e., Production Oriented Stage and Product Oriented Stage as follows:
(i) Production Oriented Stage : During the period of 1869 to 1930, marketing was production oriented i.e., anything and everything that was produced was to be sold. This stage followed the rale that “supply creates its own demand”. So, the goods were produced and the market was enough to consume these goods and demand need not be created. Under this stage it was presumed that consumers prefer widely available and low-cost products. So, the higher the production capacity, the higher were the sales of the organisation.

(ii) Product Oriented Stage : In this stage more importance is attached to the product. During the span of 1930 to 1950 marketing was product oriented i.e., emphasis was given to product sales. The firms realised that the consumers now wanted to buy only well-advertised product. So, during this stage selling efforts were given huge importance. The consumers were given importance in the sense that they were just the buyers of the product.

(c) Components of Price Mix are basic price of the product, discount, allowances, credit, terms of payment, etc.

(d) An advertisement can be based on various themes.
Some of these are discussed below:
(i) Fantasy: Certain advertisements create fantasy about the ownership of a particular product. Advertising air conditioners, credit cards, motor vehicles etc., create consumer fantasy about owning them. ‘Wish to own a credit card? Go Ahead, subscribe for Citi Bank Credit Card creates a fantasy around the product, credit card. Possession of products with fantasy provides a sense of pride and honour to the owners.

(ii) Cosmetic Appeal: Products such as cosmetics and soaps are advertised with beauty or cosmetic theme ‘Synergie’, for example, a wrinkle-free cream is sold because of its cosmetic appeal.

(iii) Technical Expertise: Products which are advertised through depiction of technical operations involved in manufacturing them are based on technical expertise theme. It shows the company’s expertise and experience in making the product. Electronic gadgets are generally advertised with this theme.

(e) Circumstances under which a bank can refuse payment of a cheque are:

1. When the amount or balance to the credit of the drawer is not sufficient to make payment of the cheque.
2. When the cheque is more than six months old i.e. it has expired.

Question 4.
Justify either for or against by giving two reasons for each of the following:
(a) Introduction stage in a Product Life Cycle is not very risky. [2]
(b) Scope of Public Relations is narrow. [2]
(c) Advertisements eliminate middlemen. [2]
(d) It is marketing which has converted yesterday s luxuries into today’s necessities. [2]
(e) A crossed cheque is a safer mode of payment as compared to an open cheque. [2]
Answer:
(a) Introduction stage in a product life cycle is very risky. It is the stage when product is launched for the first time in the market. It takes time for product to settle in the market and become readily acceptable to consumers. The sales and profit related to the product are, therefore, low. Competition is virtually absent, market is limited, prices are relatively high and little is known about the product innovation.

Growth in sales volume is at a low rate due to lack of knowledge on the part of consumers and limited distribution. Prices are usually high because of small scale of production and heavy promotional expenditure. There is high probable rate of product failure. Therefore, it is wrong to say that introduction stage in a Product Life Cycle is not very risky.

(b) Scope of public relations is very wide. It is an effort to satisfy different groups like consumers, distributors, suppliers, employees, local community and media. Public relation is the process of gaining public support for an activity, cause or organisation through information and persuasion. Therefore, it is wrong to say that scope of public relation is narrow.

(c) Advertisements eliminate middlemen. It identifies the manufacturer in relation to the product. This helps consumers to approach the manufacturers directly. It reduces channels of distribution and unwanted intermediaries. This also leads to lower overheads and costs. Therefore, it is right to say that advertisements eliminate middlemen.

(d) It is not marketing that has converted yesterday’s luxuries into today’s necessities, rather the main reason behind it is the substantial rise in income of the people. People were not able to afford things like refrigerator, T.V. washing machine, music system, etc., because of their low paying capacity, in the earlier times. Marketing and advertising have no doubt played a role in this change, but they are not the only reason behind the change.

(e) A crossed cheque is a safe mode of payment as compared to an open cheque due to the following reasons:

1. Open cheques are vulnerable to risk as these can be stolen and encashed at the bank counter. Whereas a crossed cheque can be encashed by the only person to whose account it is referred.
2. The bank is responsible if the payment, in case of a crossed cheque, is made to a wrong person. Whereas in case of open cheque, the issuer is responsible. Therefore, it is right to say that a crossed cheque is a safer mode of payment as compared to an open cheque.

Section – B (60 Marks)
(Attempt any FOUR Questions)

Question 5.
(a) What do you mean by endorsement of a cheque? Explain any three types of endorsements. [5]
(b) Explain the following with an example for each: [5]

1. marginal cost
2. opportunity cost.

(c) Mention the various stages of ‘Product Life Cycle ’. How is Product Life Cycle advantageous? [5]
Answer:
(a) Endorsement of a cheque means writing something on the back of the cheque with the intention of transferring the rights therein. Endorsement is required when the cheque is payable to order.
A bearer cheque can be transferred by mere delivery and no endorsement is required on it.

Endorsement may be of the following kinds:
(i) Blank or General Endorsement : If the endorser simply puts down his signature on the cheque without writing the name of the endorsee, it is called Blank or General Endorsement. The effect of such an endorsement is that the cheque becomes payable to bearer. The property in the cheque can now be transferred by mere delivery and no endorsement is required.

For example, a bill is made payable to the order of Mr. X who puts his signature on the back of the bill. This is an endorsement in blank by Mr. X and in such case, the property in the bill may pass by mere delivery as if the instrument is payable to the bearer.

(ii) Full or Special Endorsement: If the endorser specifies the name of the endorsee and signs the cheque, it is called Full or Special Endorsement. The , effect of such an endorsement is that the endorsee must endorse it again if he wants to transfer the property in the cheque to somebody else. For example, if an endorsement, “pay to Mr. Y” or order” followed by endorser’s signature, it is nothing but the endorsement in full.

(iii) Restrictive Endorsement : When the endorser restricts the further negotiation of a cheque, it is called Restrictive Endorsement. The effect of such an endorsement is that the endorsee gets all the rights to the endorser except the right of negotiation.
The following are the examples of restrictive endorsement.
(a) Pay to A only.
(b) Pay to A for my use.
(c) Pay to A for the account of B.

(b) (i) Marginal Cost: Marginal cost is the cost of producing one additional unit of a product. The concept of marginal cost is very useful in making managerial decisions concerning price fixation. For example, the cost of manufacturing 10 units of a product is ₹ 100, that is ₹ 10 per unit. If the company manufactures 11 units, cost becomes ₹ 112. Marginal cost = ₹ 112 – ₹ 100 =12(11th unit).

(ii) Opportunity Cost : Opportunity cost means the benefit sacrificed for selecting a particular course of action. It is the maximum advantage that could be obtained if the resource was put to an effective use. The opportunity cost of producing one commodity A is the amount of B that must be sacrificed in order to use resources to produce A rather than B.

For example, a firm buys a machine of ₹ 25,000. This amount could be invested in shares’ or debentures. The loss of dividend or interest that could be earned is the opportunity cost. Opportunity cost is not recorded in books of accounts. It is useful in comparing alternatives and in making decisions.

(c) Every product passes through a number of stages, namely, introduction, growth, maturity, decline and abandonment. These stages are collectively referred to as Product Life Cycle. It is represented as a curve that determines the course of a product’s life representing the sales and profits over its life time.
(i) Introduction Stage: This is the stage when product is launched for the first time in the market. It takes time for product to settle in the market and become readily acceptable to consumers. The sales and profits related to the product are, therefore, low.

(ii) Growth Stage : If the new product satisfies the market, it will enter a growth stage. This stage is characterised by an increase in the number of buyers who wish to buy the product.

(iii) Maturity Stage : The product enters into maturity stage as competition intensifies further and market gets saturated. Profits come down because of stiff competition, and marketing expenditures rise. The prices are decreased because of competition and innovations in technology.

This stage may last for a long period as in the case of many products with long-run demand characteristics. But sooner or later, demand of the product starts declining as new products are introduced in the market. Product differentiation, identification of new segments and product improvement are emphasised during this stage.

(iv) Decline Stage : This stage is characterised by either the product’s gradual displacement by some new products or change in consumer buying behaviour. The sales fall down sharply and the expenditure on promotion has to be cut down drastically.

(v) Abandonment Stage: Most firms abandon the product in order to put their resources to better use. Tastes of consumers may change and new innovations enter the market to take the place of the abandoned products. Some firms try to postpone abandonment by introducing new models with unique features. In case of heavy losses and no future, the firm may sell out and merge with a stronger enterprise.

The product life cycle offers the following advantages:
(a) When the product life cycle is known the firm can prepare an effective product plan.
(b) Management can take advance steps before the decline of the product.
(c) The maturity stage can be extended by finding new uses of the product.
(d) Technological innovations can be adopted to improve the quality, features and design of the product.

Question 6.
(a) Marketing is a wider term than selling. Explain. [5]
(b) Distinguish between Receipts and Payments Account and Income and Expenditure Account. [5]
(c) What pricing strategy will be used to launch. [5]
(i) a high end smart phone in the market
(ii) shampoo in the market.
Answer:
(a) Marketing is a wider term than selling, and it includes selling. It is a total system of interacting business activities designed to plan, promote and distribute goods and services to present and potential customers. It develops the product according to customer needs.

On the other hand, selling may be defined as the performance of those activities which lead to obtaining orders from customers and direct the flow of goods and services from the seller to the buyer. It bends the customer according to the product. Thus, it involves activities connected with the transfer of goods, already produced, to the customers.

Distinction Between Marketing and Selling

S.No.	Basis of Distinction	Marketing	Selling
1.	Scope	Marketing covers development of products according to the needs of customers, collection of goods and distribution of goods for satisfaction of customers. It involves product planning, sales promotion, market research, etc.	Selling is a part of marketing and it covers simply obtaining orders and delivering them to customers. It is concerned with sale of goods which are already produced.
2.	Emphasis	Marketing emphasises on the mission and goals of business which are long-term.	Selling has short-term objectives which are generating revenue and maximisation of profits.
3.	Orientation	Marketing is customer oriented. The objective is to satisfy the wants of customers.	Selling is product oriented. The objective is to convert the product into cash.
4.	Beginning	Marketing begins much before the goods are produced and continues ever after the sale.	Selling begins after goods are produced and ends with the sale.
5.	Concentration	Marketing concentrates on the need of the buyer.	Selling concentrates more on the need of the seller as compared to buyer.
6.	Aim	Marketing aims at earning profit through customer satisfaction.	Selling aims at earning profit through maximum sales.

(b) Following are the points of distinction between Receipts and Payments Account and Income and Expenditure Account:

	Points of Distinction	Receipts and Payment Account	Income and Expenditure Account
1.	Nature	It is a statement of cash transactions for a period.	It is another name for profit and loss account of the non-trading organisations.
2.	Type of Account	It is a real account.	It is a nominal account.
3.	Object	It shows merely the cash In hand/bank at the close.	It represents the net result of all the activities during the year resulting in surplus or deficit, as the case may be.
4.	Contents	It records both capital and revenue items of any period current, previous or succeeding years.	It contains only the items of revenue nature of the current accounting period only.
5.	Opening Balance	It commences with opening balance of cash in hand and at bank.	It does not begin with any opening balance.
6.	Closing Balance	Its balance at the end shows the cash in hand and at bank (or overdraft) at the end of the year.	Its balance at the end shows the surplus or deficit for the year.
7.	Form	Receipts are entered on the debit side and payments on the credit side.	Income is shown on the credit side and the expenses on the debit side.
8.	Period of Items	It may comprise not only receipts and payment for the current year but also for the previous or/and succeeding years.	It contains income and expenditure of the current accounting period only.
9.	Non-cash Items	It contains only cash items.	It contains non-cash items, e.g., depreciation, loss on sale of assets also.
10.	Balance Sheet	No balance sheet is prepared.	A balance sheet is usually prepared in this account.

(c) Different pricing strategies are adopted to launch different types of products :
(i) To launch a high end smart phone in the market, a suitable pricing strategy is Skimming Pricing. In this strategy, a very high price is set so that in the initial stages the cream of demand may be skimmed and the investment made in the product is quickly realised. The aim is to‘sell to classes’who don’t care how much they pay for a novel product. Later on, the price may be reduced to tap other segments of the market. This strategy is appropriate in case of a highly distinctive product such as a high end smart phone.

(ii) To launch a shampoo in the market, a suitable pricing strategy is Penetrating Pricing. This strategy involves setting a low price in the initial stage so as to make the brand quickly popular and to maximise the market share. The manufacturer seeks to sell to the masses. The policy results in high sales volume during the initial stages of a product’s life cycle. Penetrating pricing is an aggressive pricing strategy and it may be successfully used to launch a fast moving consumer good like shampoo.

Question 7.
Write short notes on :
(a) Matching Principles of Accounting.  [5]
(b) Types of Business Assets.  [5]
(c) Drawbacks of Sales Promotion.  [5]
Answer:
(a) Matching Principle of Accounting : According to this principle, cost of a particular period should be charged from die revenue of same period only. Only such matching of cost and revenue can reveal the true profit or loss for a period. This principle provides the guidelines as to how the expenses are to be matched with revenue.

It requires that in determining the net profit, all costs which are applicable to revenue of that period should be charged against that revenue. For matching costs with revenue, first revenues should be recognised and then costs incurred for generating that revenue should be recognised. The matching of costs with revenue is based on the accrual system of accounting. While matching, costs with revenues, the following points must be considered.

For example, salary paid in January 1998 relating to December 1997 should be treated as the expenditure for the year 1997 and not 1998.
(i) When an item of revenue is included in the Profit and Loss Account, all expenses incurred on it whether paid or not, should be included in the Profit and Loss Account. Outstanding expenses are debited in the Profit and Loss Account on this basis.

(ii) If an amount is spent, but revenue from it will be earned in the next year, the amount should be carried down as an asset and should be shown as an expense next year. Prepaid expenses, (e.g., prepaid insurance) are shown as assets in the Balance Sheet on this basis.

(iii) Cost of goods remaining unsold at the end of the year together with expenses incurred on them must be carried forward to the next year. Therefore, closing stock is carried over to the next year as opening stock.

(iv) Incomes received in advance must be treated as a liability while income earned but not received should be recognised as revenue.

(b) Types of Business Assets : Business assets may be classified as follows:
(i) Fixed Assets: Fixed assets are those that are acquired and held in the business for permanent use with view to carry on the business, such as land and buildings, plant and machinery, furniture, tools, motor cars, etc. The benefit from fixed assets is derived over a long period.
Fixed assets may be further classified into:
(a) Tangible assets, and
(b) Intangible assets.

(a) Tangible assets are those which have a physical existence and can, therefore, be seen, touched and felt. These include movable assets like land and buildings, plant and machinery, furniture, etc.
(b) Intangible assets are the rights and privileges which will generate revenue in the future. They are called intangible because they cannot be touched and seen. Goodwill, patents, trademarks, copyrights and franchises are examples of intangible assets.

(ii) Wasting Assets: Some of the fixed assets are termed as wasting assets. Wasting assets are those assets which diminish in value by reason of the extraction or removal of natural products, such as minerals, timber, oil, gas, which they contain Mines, quarries, etc. are examples of wasting assets.

(iii) Current Assets : Current assets are also known as floating assets or circulating assets. These are those assets which are held in the form of cash. The usual current assets are cash, short-term investments, bills receivable, debtors and stock. The same asset may be a fixed asset to one business and a floating asset to another. Thus, machinery would be a fixed asset in a manufacturing business, but is a floating asset to a machinery dealer. So, whether a particular asset is a fixed or a floating one has to be decided with reference to the purpose for which it is acquired.

(iv) Liquid Assets : Liquid assets are a sub-division of current assets and consist of the items which are the equivalent of cash, or can quickly be converted into cash, e.g., cash in hand, cash at bank, bills receivable, gilt-edged securities, etc.

(v) Fictitious Assets : Fictitious assets are, as the name implies, really not assets. They do not have any physical form and have no realisable value. Preliminary expenses of a company, expenses on issue of shares and debentures, discount on issue of shares and debentures, debit balance of profit and loss account, are examples of fictitious assets.

(c) Drawbacks of Sales Promotion:

1. Sales promotion activities have temporary and short life.
2. Too many sales promotion activities affect the brand image. Consumers are of the opinion that such activities are conducted due to the lack of popularity and overstocking of products of a company.
3. Sales promotion activities are only supplementary devices to supplement selling efforts of other tools of promotion.
4. Sales promotion is ineffective when there is a declining market for an established brand and when there is no product development.
5. Discounts or rebates are allowed by boosting the prices of products with a view to sell at a given gain, which is not real.

Question 8.
(a) Mention any five ways as to how ‘Good Public Relations ’ help business enterprises. [5]
(b) Human Resource Management is the management of people at work. With reference to the above statement, explain the role of Human Resource Management in an organization. [5]
(c) Explain the following elements of Public Relation: [5]

1. Dialogue
2. Persuasion

Answer:
(a) Good Public Relations help business enterprises in the following ways:
(i) Improving the image of the Organisation :
Public relations play a vital role in the achievement of specific objectives at all levels in an organisation’s work by communicating an effective message. It is an excellent and cost-effective method of improving the image of an organisation and its product.

(ii) Promoting a Positive Image:
Public relation helps to promote a positive image of the organisation. It protects an organisation by minimising the damage which occurs if something has become unfavourable.

(iii) Achieving Planned Objectives:
Public relation is the total communication activity of the organisation to achieve its planned objectives. It aims at winning the confidence and trust of various interested parties of an organisation by fulfilling its social obligations. Effective use of public relations can ensure the growth and development of an organisation.

(iv) Ensuring Effective Communication:
Now-a-days, it is essential to use public relations aggressively to ensure effective communication. Public relation helps an organisation to operate more successfully at different levels of business. The benefits of public relations can be realised in terms of increasing customers’ awareness, shareholders’ satisfaction, high morale of employees, wide business attention, etc. Public relations requires certain skills and expert knowledge, so that communications can be effective in reaching out to the targeted public.

(v) Drawing the Attention of the Public:
Public relation helps to draw the attention of the public towards the products and ideals of an organisation. An organisation should develop a two-way communication system through which it not only informs the public of its policies and programmes but also studies the reactions of the public towards the organisation.

(vi) Satisfying different groups :
Public relation is an effort to satisfy different groups like consumers, employees, shareholders etc. For example, with the help of public relation, the expectation of any particular group is acknowledged.

(b) Human Resource Management :
Human resource management is concerned with the management of people (human resources) at work. It aims at the efficient utilisation of human resources in an organisation. It is also essential to activate non-human resources through a fuller utilisation of the workers to achieve the goals of the organisation.
The role of human resource management in an organisation is summarised as follows:

1. Searching and retaining the talents required for an organisation through various ways like recruitment, selection, placement and orientation.
2. Maximum stress is laid upon individual development through training, performance appraisal and other development process.
3. Optimum utilisation of file available human resources and channelising them into best possible ways.
4. At the corporate level the human resource management is mostly required to build up a team spirit among the various groups of human resource.
5. Satisfaction of the employee’s interest is yet another role of HRM. It aims at providing job security to workers.

(c) Elements of Public Relation:
(i) Dialogue : This refers to conversation along with certain predefined and predetermined objectives. It may be written or spoken. It is a method of communication. Dialogue is very important or in other words it is the base of a message because a group of dialogues form a message.
Nature of dialogue:
(a) Method of Communication : Dialogue is one of the methods of communication where by one person converses with other or a group.
(b) Message: Message is must for every dialogue as dialogue tries to represent that message to the group.
(c) Objective: Dialogue is always done on the basis of achieving some pre-determined objectives.
(d) Enthusiasm : Dialogues are always done with enthusiasm so that receivers are fully aware of what is being said.

Importance of Dialogue:
Dialogue is essential for any concern because of the following reasons:
(a) Enthuses favourable responsory among the receive.
(b) Transmits the message in the most effective manner.
(c) Lightens the gap of communication.
(d) Helps in achieving the predetermined objectives.

(ii) Persuasion :
Persuasion is the art or method or ability to convince someone through effective communication. In other words, it means making the other party believe – without force – through an argument or reasoning. Persuasion is a reciprocal process.
Nature of Persuasion:
(a) Method : Persuasion is a method of influencing or convincing the behaviour of other persons towards company’s favour.
(b) Effective Communication: Persuasion is the result of effective communication and where there are no barriers.
(c) Reciprocal Process: Persuasion is a reciprocal process in which both the parties are dependent on one another.
(d) Goal Congruence: Persuasion helps in unifying the individual goals with that of the organization.

Importance of Persuasion : Persuasion is vital for any organisation because of the following reasons:
(a) It helps in gaining favourable responses.
(b) It is an outcome of effective communication.
(c) It helps in better understanding of the message to be communicated.
(d) It helps in achieving the objectivity of growth and expansion of any business organisation.

Question 9.
CASE STUDY
September 19, 2011, The Strategist Marketing is the largest selling instant noodle Maggi s 25th anniversary in the country, it invited diehards to write in about what the brand meant to them. The entries indicated “for a mother Maggi meant an ally; for a student in a hostel it meant a midnight snack. ” Some of these stories were picked up and splashed on Maggi’s packaging.
(a) Distinguish between brand loyalty and brandequity. [3]
(b) How does a brand become famous? Explain with the help of an example. [2]
(c) Examine the advantages of Branding. [5]
(d) “Brand name should be selected with utmost care.” List the essentials of a good brand name. [5]
Answer:
(a) Distinction between Brand Loyalty and Brand Equity:
(i) Brand Loyalty :
Brand loyalty is a customer’s favourable attitude towards a specific brand. Branding helps in creating and maintaining customers’ loyalty towards a brand. The likelihood of consistent purchase of a brand depends on the strength of brand loyalty. Brand loyalty varies from product to product.

(ii) Brand Equity:
The value of the brand is referred to as brand equity. It is the economic value associated with a brand’s strength in a market. A well managed brand is a valuable asset to an organisation. It provides stability to an organisation’s sales volume.

(b) A brand becomes famous by adopting the following ways: (i) Advertisement: To make a brand famous in the
market it is very essential to advertise it at regular intervals with all its positive points. So that it can capture the minds of the customers.
(it) Publicity: Good publicity can enhance the image of the organisation and ultimately the brand is promoted among the various users in the market.
(iii) Quality Control: Until and unless the quality of the product is maintained or enhanced the brand would not become popular among the customers.
(iv) Schemes: Various gift schemes, discount offers and free gifts can also make a brand famous among the users.

Example : It is due to repeated advertisements that Lux soap, Colgate toothpaste, Titan watch, Maruti car and other brands have become popular in the market. Also, when Samsung entered the mobile market in India, it achieved instant recognition because of its heavily advertised brand name for other products.

(c) The various advantages of branding are as follows:

1. It helps to identify products and process orders.
2. It helps the seller in market segmentation.
3. It secures brand loyalty.
4. It points out the unique features of the products.
5. It ensures consumers about product availability and standard.
6. Brand helps to build a corporate image of the concern.
7. Branding improves decision making process.
8. Branding helps line extension of the product.
9. Branding helps the product to be legally registered.
10. Branding helps the consumer to identify the differences in the quality of the product.
11. The price of a branded product is fixed or uniform (written on packet). Thus, consumers are not scared of being cheated by unscrupulous sellers.
12. Branded products are invariably packed which prevents adulteration and helps to preserve the quality of the product.

(d) Brand Name :
A brand name is an identifying name of a product that can be spoken. It refers to a special word, symbol, letter or mixture of all these. Sometimes, a brand name becomes a product’s only distinguishing characteristic. It is as fundamental as the product itself, and thus, it should be selected with utmost care.
Some of the essentials of a good brand name are:

1. It should be able to identify the product.
2. It should suggest the product quality.
3. It should show all the benefits of the product.
4. It should be easily pronunciable.
5. It should be distinctive.
6. It should not carry any misinformation.
7. It should be attractive and appealing to eyes.
8. It should be simple and brief.
9. It should be capable of legal registration.
10. It should be self explanatory.

Question 10.
CASE STUDY
September 19, 2011, Mint
The Government wants to start specialised courses that will provide training in skills needed in the automobile industry, part of a wider effort to ensure the economy can take advantage ofthe expected influx of young people into the workforce.
The Indian auto industry’s annual sales rose 20% to ? 3.27 trillion in 2010-11 from the year before, according to the Society of Indian Automobile Manufacturers (Siam) an industry lobby. This is expected to rise fourfold by 2020, according to Siam.
The automotive service sector is facing a shortage ofabout 300,000 skilled workers, according to a recent survey.
Gujarat, for instance, may see at least 100,000 new job opportunities in the sector.
The backbone of India’s skill development system is the network of Industrial Training Institutes (ITIs) managed by the labour ministry. The polytechnics were set up by India s first Prime Minister Jawaharlal Nehru to create a pool of industrial foot-soldiers.
NSDC (National Skill Development Corporation) has a mandate to train about 150 million by 2022 in an array of sectors alreadyfacing manpower shortage. This is part of the larger national mandate to train 500 million in a decade to help staff manufacturing units.
(a) Describe the need or importance of skilled labour in
the Automobile Industry in India. [5]
(b) What is training? How is it different from education ? [5]
(c) Examine any two types of training towards develop
ment of human resources for the Automobile Industry. [5]
Answer:
(a) Importance of Skilled Labour in the Automobile Industry:
Automobile industry is different in nature from many other industries because of its safety and mass usage requirements. Skilled labour has a high importance in this industry because of many reasons. Some of these reasons are discussed below:

1. Better Safety : Skilled labour has a better job knowledge-theoretical as well as practical. It is thus essentially required for safety purpose so that machines and equipments are operated carefully.
2. Better Utilisation of Resources : Skilled labour makes better use of machinery and materials and thus reduces the wastage of resources, rather makes a better utilisation of them.
3. Reduced Cost of Supervision : Skilled labour is technically more capable and hence needs lesser supervision by senior staff. This reduces the cost of supervision.
4. Better Quality and Quantity of Production: Use of skilled labour leads to an improvement in quality and quantity of production which is essentially required for any industry, particularly automobile industry.

(b) Training :
Training is the act of improving or updating the knowledge and skill of an employee for performing a particular job. It is concerned with specific skills required for a particular type of activity. It is a process designed to maintain and improve current job performance. As an organised procedure, training is designed to create a change in the thinking and behaviour of employees. Training is a two-way and continuous process because there is not end to learning.

Training is different from education in many ways.
Following are the main points of difference between training and education:
Training

1. Training involves in­creasing knowledge and skills for a specific job.
2. Training has a spe­cific and immediate purpose of making a person proficient in a particular job.
3. Training is often given on the job.
4. The burden of training falls mainly on the employer.
5. Training is practical and job oriented.

Education

1. Education involves improving general knowledge and intel­ligence.
2. The purpose of edu­cation is general.
3. Education is gen­erally imparted in schools and colleges.
4. The burden of educa­tion falls mainly on the Government and the students.
5. Education is theoret­ical.

(c) Various types of training are required towards development of human resources for the automobile industry. We discuss two of them in the following paragraphs:
(i) On-the-Job Training: On-the-job training involves assignment of the new employee to a specific job at a machine or work place. The worker is trained while he is engaged in the work by utilising the actual work situation for the purpose. He is given the work straight away under the supervision of some senior employee and he leams the job at the hands of this experienced worker.

In this way, he is able to learn the work practically. Problems faced by him are immediately tackled; doubts if any removed and effective leadership offered. There is no problem of adjustment to the actual job after the training. With competent instructor, this type of training may be most effective for rapid training of large number of unskilled and semi-skilled workers in the automobile industry.

(ii) Apprenticeship Training : This method is used in those cases where long-term training is required to attain complete proficiency to perform a particular job. Apprenticeship training aims at providing necessary background; practical knowledge and necessary experience to the worker. Its purpose is to prepare employees for skilled occupations. It combines class room instructions, demonstrations and on- the-job training.

The method familiarizes with the complications and intricacies of the job. A trainee serving as an apprentice, has to work in direct association and under the direct supervision of his masters. Sometimes, workers are also placed as assistants to experienced workers to learn the process of work by imitation and experience. Because of its technical nature, the automobile industry makes a strong case for apprenticeship training.