* EXAM PRACTICE RAZIA MALIK SKILLS ANALYSIS, INTERPRETATION, PROBLEM SOLVING Razia Malik operates as a sole trader. She offers 1-day courses in business start-ups for Urdu-speaking people in Toronto, Canada. There are about 90,000 Pakistanis living in Toronto who are targeted by Razia. The courses cover all aspects of business start-ups, such as writing a business plan, market research, financial management, negotiation skills and legal issues. Most of her work comes from local authorities. The business charges CAD 600 for a 1-day course and can enrol up to 20 entrepreneurs. Razia rents function rooms in small hotels for CAD 150 per day, to run the courses. The course fee also includes refreshments. In 2016, the business provided a total of 200 courses and made a reasonable profit. However, Razia felt that she could improve the sales revenue of the business by marketing the business more aggressively in a wider geographical area. Her aim was to raise profit by 10 per cent. She thought that she could charge more and also reduce the amount of time travelling around the region. She spent CAD 3000 advertising on specialist Urdu websites and raised the price of the courses to CAD 900. As a result, the number of courses sold fell to 150 in 2017. Details of the costs incurred by Razia's business are shown in Table 2. Car lease per annum Insurance per annum Other fixed costs per annum Special promotion Room hire fees per course Refreshment costs per course Training materials per course Other variable costs per course Price per course 2016 5000 1000 2017 5000 1200 3000 200 180 2000 2800 O 150 150 50 50 50 70 600 900 A Table 2 Financial information for Razia Malik's business training courses (CAD) (a) Define fixed costs. (b) Define sales volume. SKORE CLASSY (2 mark (2 marks (4 marks (c) Calculate the profit made by the business in 2016, (d) Analyse two methods a business might use to increase sales volume. (6 mark (e) Price elasticity of demand for Razia's courses is estimated to be -1.2. Assess the extent to which Razia achieved her objective by raising the price of the courses from CAD 600 to CAD 900. (10 ma
a)define fixed costs
b)define sales volume
c) calculate the profit made by the businesses in 2016
e)price elasticity of demand for Razias courses is estimated to be -1.2.Asses the extent to which razia achieved her objective by raising the price of the courses from CAD 600 to CAD 900.
