Oswal 36 Sample Question Papers CBSE Class 12 Business Studies Solutions

1. (a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

 Explanation :

Principles of management are universally applicable, meaning they can be applied in various types of organisations and situations. This statement is true because management principles are fundamental concepts and practices that can be adapted to different organisational contexts.
Thus, Reason (R) provides a logical explanation for Assertion (A) by reiterating and reinforcing the idea that management principles are applicable across different types of organisations. Therefore, option (a) is the correct choice.

2. (d) Esprit De Corps

 Explanation :

In the given case, Rajan emphasises on developing mutual trust and a spirit of cooperation among the employees, which aligns with the principle of Esprit De Corps. This principle is essential for creating a harmonious and productive work environment.

3. (b) Planning is incomprehensible

 Explanation :

Planning is incomprehensible is not the feature of planning; in fact, Planning is a comprehensible and essential function of management. It involves setting objectives, determining courses of action, making decisions, and developing a blueprint for achieving organisational goals.

4. (a) Standing plan

 Explanation :

A standing plan is used for recurring activities over a period of time. It includes policies, procedures, and rules that guide decision-making and actions within an organisation on an ongoing basis.

5. (d) Rule

 Explanation :

Rules are specific statements that inform what is to be done. They do not allow for any flexibility or discretion. They leave little room for interpretation or adaptation and are often used to ensure consistency and adherence to established standards within an organisation.

6. (b) Informal organisation

 Explanation :

The book club formed by employees of Aloto Ltd, and they meet in a café, is an example of an informal organisation. Informal organisations are typically formed by employees on their own initiative for social, recreational, or interest-based purposes, and they exist outside the formal structure of the company.

7. (b) It leads to occupational specialisation since emphasis is placed on specific functions.

 Explanation :

The functional structure of an organisation is characterised by grouping employees based on their specific functions or areas of expertise, such as marketing, finance, human resources, etc. This type of structure leads to occupational specialisation as employees within each functional unit tend to focus on their specialised tasks and roles.

8. (c) It has narrow scope as it is limited to superior and his immediate subordinate.

 Explanation :

Delegation involves the transfer of authority and responsibility from a superior to a subordinate. This transfer of authority and responsibility is generally limited to the immediate superior-subordinate relationship and does not necessarily grant higher freedom to executives or involve discretionary policies. Delegation is a fundamental management process that helps distribute workload and empower employees within the established organisational structure.

9. (a) Centralised

 Explanation :

In a centralised organisational structure, the authority for decision-making rests with the top management. Decisions are made at the highest levels of the organisation, and lower-level employees have limited autonomy in decision-making.

10. (c) A situation of overstaffing or understaffing disturbs the cost-benefit analysis.

 Explanation :

In the given situation, Firoze’s decision not to hire more people indicates that he recognized the importance of maintaining an appropriate staffing level to achieve the project’s objectives efficiently. Overstaffing or understaffing can disrupt the cost-benefit analysis because having too many or too few employees can lead to resource misallocation, increased costs, and
decreased productivity. It’s important to strike the right balance in staffing to optimise performance and resources.

11. (a) Motivated and competent employees that result in job efficacy.

 Explanation :

Training and development programs can lead to motivated and competent employees who are better equipped to perform their jobs effectively.

12. (a)-(4), (b)-(1), (c)-(2), (d)-(3)

 Explanation :

Management by exception focuses on monitoring and intervening in situations or activities only when they deviate significantly from the established standards or expectations.
This principle recognises that trying to control everything can be counterproductive and results in controlling nothing.

13. (c) Management by Exception

 Explanation :

Management by exception focuses on monitoring and intervening in situations or activities only when they deviate significantly from the established standards or expectations.
This principle recognises that trying to control everything can be counterproductive and results in controlling nothing.

14. (b) The return on investment is lower than the cost of debt.

 Explanation :

If the earnings per share (EPS) fall with increased use of debt, it suggests that the cost of servicing the debt (interest payments) is higher than the return on investment generated by using that debt. This situation is generally not favourable for a firm because it indicates that the company may not be generating enough profit to cover its debt obligations, which can be a financial risk.

15. (c) Both the statements are true

 Explanation :

Statement 1 correctly defines gross working capital, which includes all current assets like cash, bills receivables, prepaid expenses, inventories, etc. and statement 2 correctly defines net working capital, which is the difference between current assets and current liabilities.

16. (b) Usable benefit

 Explanation :

In the given statement a free coupon worth 500 for a shopping of 2000, is a usable benefit because the coupon provides a tangible benefit that can be applied to reduce the cost of a future purchase.

17. (a) Publicity

 Explanation :

Publicity refers to the process of generating and disseminating information or news about a person, organisation, product, or event to the public through various media channels free of cost. It is a form of promotion or communication that aims to create awareness, interest, and positive perception among the target audience.

18. (a) Public Relation

 Explanation :

Public relation is the practice of managing and disseminating information from an organisation to create a positive image of the company in the eyes of different stakeholders.

19. (c) Both the statements are true

 Explanation :

Both statements are correct with respect to the Consumer Protection Act in India. If a customer is not satisfied with the order of the National Commission, they can appeal against such an order to the Supreme Court of India.
The Consumer Protection Act provides a three-tier redressal mechanism, which includes the District Consumer Disputes Redressal Forum (District Forum), the State Consumer Disputes Redressal Commission (State Commission), and the National Consumer Disputes Redressal Commission (National Commission). This three-tier system allows consumers to seek redressal at different levels, depending on the value of their complaints.

20. (b) District Forum

 Explanation :

Savita can file a complaint to the appropriate district forum because the value of the goods in question is less than ₹1 crore.

21. The success of an enterprise is possible only when plans are properly drawn up and implemented. Any plan needs to be translated into action or else it will become meaningless. Managers have a tendency to rely on previously tried and tested successful plans. It is not always true that just because a plan has worked before it will work again. Besides, there are so many other unknown factors to be considered. This kind of complacency and a false sense of security may actually lead to failure instead of success.


While planning, selecting the best alternative is one of the most crucial decisions because choosing and While planning, selecting the best alternative is one of the most crucial decisions because choosing and implementing the best plan is in the favor of the business. The ideal plan, of course, would be the most feasible, profitable, and with the least negative consequences. Most plans may not always be subjected to a mathematical analysis. In such cases, subjectivity and the manager’s experience, judgment, and at times, intuition plays an important part in selecting the most viable alternative. Sometimes, a combination of plans may be selected instead of one best course. The manager will have to apply permutations and combinations and select the best possible course of action.
implementing the best plan is in the favor of the business. The ideal plan, of course, would be the most feasible, profitable, and with the least negative consequences. Most plans may not always be subjected to a mathematical analysis. In such cases, subjectivity and the manager’s experience, judgment, and at times, intuition plays an important part in selecting the most viable alternative. Sometimes, a combination of plans may be selected instead of one best course. The manager will have to apply permutations and combinations and select the best possible course of action.

22. Workload analysis would enable the HR managers to conduct an assessment of the number and types of employees necessary for the performance of various jobs and accomplishment of organisational objectives. Workforce analysis would reveal the number and type of employees available and can help to understand the count of new employees needed. Whether the management’s decision to hire new employees is correct or not depends on the results of workload analysis.


  1. The roles and responsibilities of HR managers include the following:
  2. Recruitment, i.e., search for qualified personnel.
  3. Analysing jobs, collecting information about jobs to prepare job descriptions.
  4. Developing compensation and incentive plans.
  5. Training and development of employees for efficient performance and career growth.
  6. Maintaining labour relations and union-management relations.
  7. Handling grievances and complaints.
  8. Providing for social security and welfare of employees.
  9. Defending the company in lawsuits and avoiding legal complications.

23. The importance of controlling reflected in this case is that:

(i) Controlling creates an atmosphere of order and discipline in the organisation.

(ii) It helps to minimise dishonest behaviour on the part of the employees by keeping a close check on their activities.

(iii) It helps in the achievement of organisational goals through proper monitoring of performance and implementation of corrective action.

24. (a) Working capital of a firm refers to the amount of current assets which are in excess over current liabilities. If a company has a higher working capital then there will be a higher current ratio (i.e. current assets over current liabilities). Working capital are of two types gross working capital and Net working capital.

(b) The working capital for Foodisy will be low as the firm operates in the service industry and does not have to maintain inventory.
The working capital requirement for Supadelivery will be high as they need to maintain the inventory of groceries in their dark stores so that deliveries can be made on time.

25. (i) Taking corrective action: No corrective action is required when the deviations are within acceptable limits. However, when the deviations go beyond the acceptable range, especially in the important areas, it demands immediate managerial attention so that deviations do not occur again and standards are accomplished.

(ii) Analysing deviations – Critical point in control: It is neither economical nor easy to keep a check on each and every activity in an organisation. Control should, therefore, focus on key result areas (KRAs) which are critical to the success of an organisation. These KRAs are set as the critical points.
If anything goes wrong at the critical points, the entire organisation suffers. For instance, in a manufacturing organisation, an increase of 5 percent in the labour cost may be more troublesome than a 15 percent increase in postal charges.

(iii) Setting Performance Standards: This step in the controlling process is setting up of performance standards. Standards are the criteria against which actual performance would be measured. Thus, standards serve as benchmarks towards which an organisation strives to work.

(iv) Measurement of Actual Performance: Performance should be measured in an objective and reliable manner. There are several techniques for measurement of performance. These include personal observation, sample checking, performance reports, etc. As far as possible, performance should be measured in the same units in which standards are set as this would make their comparison easier.

26. Industrial efficiency depends on worker competencies to a large extent. The statement is based on the Taylor’s principle of “Development of each and every person to his or her greatest efficiency and prosperity”. Taylor was of the view that the concern for efficiency could be built from the process of employee selection. Each person should be scientifically selected. Then work assigned should suit her/his physical, mental, and intellectual capabilities. To increase efficiency, they should be given the required training. Efficient employees would produce more and earn more. This will ensure the greatest efficiency and prosperity for both company and workers.


There should be a balance between authority and responsibility. An organisation should build safeguards against the abuse of managerial power. At the same time, a manager should have necessary authority to carry out his responsibility.
For instance, if a delivery manager can negotiate a project for an account settlement period of say 30 days which can help him/her bag a project worth crore of rupees, but the company allows him/her to offer a period of 15 days to settle all accounts. Now this shows an imbalance in authority and responsibility. The shorter duration is likely to cause the manager to lose the deal and hence the loss would eventually be borne by the business.
Also, if a supervisor does not have sufficient authority to tell the repercussions of willfully not following the orders to a subordinate, then the subordinates would not take his/her authority seriously, and there is likely to be delays in the work delegated to subordinates.

27. Alpa is able to produce 350 questions but at a higher production cost as she used 3 team members. Therefore, Alpa is effective but not efficient since for the same output, more inputs (human resources) were used.
On the other hand, Rohan spent lesser cost on the project but could not achieve the target count of 350 questions in 7 days. As a result, his project could not be delivered on time. Therefore, Rohan was efficient but not effective.

28. Zilogo Fashion Ltd. should use a divisional structure for its business. This is because the firm has decided to enter different, multiple product categories. As an organization diversifies into varied product categories, the need for a more evolved structural design is felt to cope with the emerging complexity.
In a divisional structure, the organisation structure comprises of separate business units or divisions. Each unit has a divisional manager responsible for performance and who has authority over the unit. Manpower is grouped on the basis of different products manufactured, which leads to specialisation. Each division is self-contained as it develops expertise in all functions related to a product line. Divisional structure promotes flexibility and initiative because each division functions as an autonomous unit which leads to faster decision making.


(a) Delegation of authority is the concept used by Alok that helped him focus on the company’s longterm objectives.
Delegation refers to the downward transfer of authority from a superior to a subordinate. It is a pre-requisite to the efficient functioning of an organisation because it enables a manager to use his time on high-priority activities. It also satisfies the subordinate’s need for recognition and provides them with opportunities to develop and implement initiative.

(b) Some benefits of delegating tasks include the following:

    1. Effective management: By empowering the employees, the managers are able to function more efficiently as they get more time to concentrate on important matters.
    2. Employee development: As a result of delegation, employees get more opportunities to utilise their talent and this may give rise to latent abilities in them. It allows them to develop those skills which will enable them to perform complex tasks and assume those responsibilities which will improve their career prospects.
    3. Facilitation of growth: Delegation helps in the expansion of an organisation by providing a ready workforce to take up leading positions in new ventures.

29. (a) Fixed capital: Fixed capital refers to investment in long-term assets. Management of fixed capital involves the allocation of a firm’s capital to different projects or assets with long-term implications for the business.

(b) Factors affecting the requirements of fixed capital are as under:

  1. Nature of Business: The type of business has a bearing upon the fixed capital requirements. For example, a trading concern needs lower investment in fixed assets compared with a manufacturing organisation; since it does not require purchasing of plant and machinery, etc.
  2. Scale of Operations: A larger organisation operating at a higher scale needs a bigger plant, more space, etc. and therefore, requires higher investment in fixed assets when compared with a small organisation.
  3. Choice of Technique: Some organisations are capital-intensive whereas others are labour intensive. A capital-intensive organisation requires higher investment in plant and machinery as it relies less on manual labour. The requirement of fixed capital for such organisations would be higher.
  4. Technology Upgradation: In certain industries, assets become obsolete sooner. Consequently, their replacements become due faster. Higher investment in fixed assets may, therefore, be required in such cases. For example, computers become obsolete faster and are replaced much sooner than say, furniture.

30. (a) The consumer rights that are violated in this case are:

(i) Right to Safety: The consumer has a right to be protected against goods and services which are hazardous to life, health, and property. For example, electrical appliances which are manufactured with substandard parts or do not conform to the safety norms might cause serious injury.

(ii) Right to seek redressal: The consumer has a right to get relief against unfair trade practices or restrictive trade practices or unscrupulous exploitation in case the product or service falls short of his expectations. The Consumer Protection Act 2019 provides for redressal to the consumers including replacement of the product, removal of the defect in the product, compensation paid for any loss or injury suffered by the consumer, etc.

(b) The following are the two responsibilities of a consumer which he should keep in mind while purchasing the goods:

(i) Awareness: A consumer should be well aware of the availability of various goods and services so that he can choose carefully and prudently.

(ii) Looking for quality marks: A consumer must always look for the quality certification marks before purchasing the goods such as ISI mark in case of electrical goods, AGMARK in case of agricultural goods, etc. Those marks signify that quality inspections are done.

31. (i) Business environment is the sum total of all individuals, institutions, and other forces that lie outside the control of a business organisation but may influence its functioning and performance.

(ii) The dimensions of the business environment highlighted in the above case includes the following:

  1. Social Environment: In the current times, the customs, traditions, values, social trends, and society’s expectations of food business are drastically changing. Healthier eating habits are becoming the norm of the day and people are moving away from unhealthy, ultra-processed foods towards healthier food options, which has created demand for healthy snacking options, organic foods, etc.
  2. Economic Environment: With an increase in disposable income of the urban consumer, there is an increase in spending capacity which propels demand for healthy food options.
  3. Technological Environment: With businesses entering social media and digital platforms for advertising, the barriers to entry have been reduced drastically for new and upcoming brands and products. In addition, the innovation in food technology is making it possible for companies to switch supply to healthier food options while maintaining shelf lives of these products.

32. (i) The elements of the marketing mix being taken into consideration by Rupali are Product and Price.
      (ii) The functions of marketing highlighted here are explained below:

  1. Gathering and analysing market information: The primary focus of marketing is to ‘find wants and fulfill them’. Therefore, it is absolutely essential for a company to study the needs and preferences of its target market in order to satisfy their needs and wants optimally.
  2. Product designing and development: Every marketer strives to achieve his marketing objectives by creating offerings to satisfy a need or a want. Therefore, one of the core functions of marketing is to develop the product in the most effective and efficient way. Every marketer endeavours to add value to his product by introducing constant innovations in the product to enhance both its utility and attractiveness in the eyes of potential buyers and gain a competitive edge.
  3. Pricing: Price is the monetary value paid in the consideration for the purchase of a product or service by a buyer to its seller. The process of determining the price of a product or service is called pricing. It is a crucial decision for marketers as consumers are very sensitive to the price. The factors affecting price determination are cost of product, the utility and demand, extent of competition in the market, government and legal regulations, pricing objectives, and marketing
    methods used.


(a) Creating a Market Offering: On the part of the marketers, the effort involves in creation of a ‘market offering. Market offering refers to a complete offer for a product or service, having given features like size, quality, taste, etc; at a certain price; available at a given outlet or location, and so on.

(b) Customer Value: The process of marketing facilitates the exchange of products and services between the buyers and the sellers. The buyers, however, make buying decisions on their perceptions of the value of the product or service in satisfying their need, in relation to its cost. A product will be purchased only if it is perceived to be giving greater benefit or value for the money. The job of a marketer, therefore, is to add to the value to the product so that the customers prefer it in relation to the competing products and decide to purchase it.

(c) Needs and Wants: The process of marketing helps individuals and groups in obtaining what they need and want. Thus, the primary reason or motivation for people to engage in the process of marketing is to satisfy some of  their needs or wants. In other words, the focus of the marketing process is on satisfaction of the needs and wants of individuals and organisations.

33. (1) (a) Given: Share capital = ₹80 lakhs
Cost per share = ₹10
Earnings per share in the previous year = ₹0.50
Additional capital required = ₹50 lakhs
Interest on Debentures issued = 10%
Profit in current year = ₹10 lakhs
Tax paid = 30%
EBT = EBIT – Interest = 10,00,000 – 5,00,000 = 5,00,000
EAT = EBT – Tax = 5,00,000 – 1,50,000 = 3,50,000
EPS = EAT/No. of equity shares = 3,50,000/8,00,000 = 0.43 per share

(b) This indicates that the company now earns less per share as compared to the previous situation.

(2) (a) Necessary conditions for taking advantage of trading on equity are Rate of return > rate of interest and interest on debt is tax deductible.

(b) Total capital with the company = 9,00,000 × 10 = 90,00,000
Loan taken = 40,00,000
Total capital now = 1,30,00,000
Return on 90,00,000 @ 15% = ₹13,50,000
Return on 1,30,00,000 @ 15% = ₹19,50,000
Return on Investment = 15%
Rate of interest = 10%
Yes, financial mangers will be able to take advantage of the equity trading.
Case 1: Before Expansion
Capital employed = ₹90,00,000
Earning before tax and interest (EBIT) = 13,50,000
Interest paid = 0
EBT = EBIT – Interest = 13,50,000
EAT = EBT – Tax = 13,50,000 – 4,05,000 = 9,45,000
EPS = EAT/No. of equity share = 9,45,000/9,00,000 = ₹1.05 per share
Case 2: After Expansion
Capital employed = ₹1,30,00,000
Earning before tax and interest (EBIT) = 19,50,000
Interest paid = 10% of 40,00,000 = 4,00,000
EBT = 15,50,000 (19,50,000 – 4,00,000)
EAT = EBT – Tax = 15,50,000 – 4,65,000 = 10, 85,000
EPS = EAT/No. of equity share = 10,85,000/9,00,000 = ₹1.20 per share

34. (a) Semantic barriers to communication are concerned with problems and obstructions in the process of encoding and decoding of the message into words or impressions. Normally, such barriers result on account of use of wrong words, faulty translations, different interpretations, etc.

(b) The three semantic barriers to communication are as follows:

  1. Poorly expressed message: Sometimes intended meaning may not be conveyed by a manager to his subordinates. These poorly expressed messages may be on account of inadequate vocabulary, usage of wrong words, omission of needed words, etc.
  2. Technical jargon: It is usually found that specialists use technical jargon while explaining to persons who are not specialists in the concerned field. Therefore, they may not understand the actual meaning of many such words.
  3. Body language and gesture decoding: Every movement of body communicates some meaning. The body movement and gestures of communicator matters so much in conveying the message. If there is no match between what is said and what is expressed in body movements, communications may be wrongly perceived.


(a) (i) Formal communication: “When the General Manager came to know about it he ordered for fumigation in the company premises and cleaning of the surroundings.”
Informal communication: “Colleague sent a text message to his superior”. “Mr. B. Chatterjee sent a text message to employees of the organisation requesting them to donate blood”.

(ii) Features of informal communication are:
Communication that flows without following the formal defined path.
Arises out of social interactions among the employees.

(b) (i) Career advancement opportunity: Career advancement opportunity is a recognition or rise in status of an employee whose position is heightened by giving a higher role in decision-making.
It refers to empowering by recognising their true potential and providing opportunities to them to oversee and take up more responsibilities in the organisation. These employees are also provided training to enhance their skills and knowledge that can be applied to meet organisational goals.

(ii) Job security: Job security is an assurance that employees will be continuing gainful employment throughout their lives. Job security can be assured by signing the terms of contractual agreement, collective bargaining employment or (prevailing) labour laws that can prevent arbitary termination, job dismissal, unemployment and lockouts.

CBSE 36 Sample Question Papers Commerce Stream

All Subjects Combined for Class 12 Exam 2024

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