The document provides information about a case study involving Games Workshop and tasks related to analyzing the company's human, physical, technological, and financial resources. The three key points are: 1) Games Workshop manages its human resources by staffing to meet changing demands, using teams to monitor staff, and encouraging a culture of incentives and resources to support employees. 2) The company's main physical and technological resources that need consideration are stock control, maintenance, refurbishment, security, and intellectual property rights protection. 3) Analyzing and improving how the company manages its human, physical, and technological resources can enhance its performance by supporting relevant examples. Proper resource management is important for business success.

1. Part One — Games workshop Case study
Scenario
You have been asked to help produce material for an information pack on business
Resources used at Games workshop.
Task 1 (P1)
Describe how a selected business manages its existing human resources
Using examples from Games workshop, describe how the business manages its
existing human resources.
Prepare a leaflet that contains:
a) a definition of human resources
b) a description of how staffing is managed. This must include information about the
following
1. How staff are managed to meet changing business demands.
2. How the business uses teams and how the staff are monitored.
3. The kind of culture encouraged in the business, incentives, resources and
facilities that are given to the staff.
Task 2 (P2)
Describe the main physical and technological resources that need to be considered in the
running of a selected organisation
You now need to consider the main physical and technological resources required for
business success.
Produce a report about Games workshop, describing the suitability of its
physical and technological resources covering the following aspects:
a) Stock control
b) Maintenance
c) Refurbishment
d) Security
e) Intellectual Property Rights (Patents and Copyright)
Task 3 (M1)
Assess how managing human, physical and technological resources can improve the
performance of a selected organisation
You have already examined the human, physical and technological resources for
Games workshop.
Building on your evidence from Tasks 1 and 2, explain in detail how these resources
can improve the organisation’s performance.
You should support your explanation with relevant examples.
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2. Part two – Sources of finance, costing and budgets
Scenario
You have completed your one-year contract with Business Link and decide to look
more towards the financial aspects of the business world. After a few weeks you
secure employment as a trainee at a local firm of Financial Advisors – Beddington
and Co. Your role involves providing support to the senior business advisors who
give banking and financial advice to new and existing businesses.
Task 4 (P3)
Describe where sources of finance can be obtained for starting up a selected business
After three months in the role, your supervisor gives you the task of providing advice
and guidance to two recently qualified hairdressers - Emma and John - who are in
the process of setting up a hairdressing business as a partnership.
First of all, Emma and John need guidance on the financial support available for
starting a new business. They will need finance to help with premises, other assets
and equipment e.g. salon fixtures and fittings and hairdressing equipment, working
capital to finance the day to day running of the business
Put together an information pack for Emma and John which
clearly shows those sources of finance which are likely to be
available when they first start up the business as a partnership.
This must include:
• A description of all the internal and external sources of finance which may be
available to this partnership business i.e. what is it?
• Examples of the institutions where these sources of finance can be accessed,
i.e. where would you get it from?
• State clearly what each source of finance is likely to be used for e.g. asset
finance, working capital finance i.e. examples of what this business may use
each source for
Task 5 (P4)
Give the reasons why costs and budgets need to be controlled
(a) Classifying costs
After your help Emma and John now have a better idea about the potential sources
of finance available to them. However, they are still concerned that they know very
little about using costing techniques to help them evaluate their business idea.
You know it is very important that Emma and John understand the difference
between Fixed and Variable costs. You ask Emma and John to bring a list of the
main costs they think they will have to pay to keep the salon running on a day-to-day
basis.
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3. (i) Give a definition of fixed and variable costs (you must relate the
definitions to the hairdressing business to make them more
understandable for Emma and John), and
(ii) Produce a table which clearly classifies each of the following costs
identified by Emma and John as Fixed or Variable.
- Rent
- Monthly loan interest payment
- Gas and electric (combined ‘Dual Fuel’ bill paid by monthly direct
debit)
- Business Rates paid by monthly direct debit
- Water rates paid by monthly direct debit
- Annual Gas boiler service cost
- Insurance premiums e.g. buildings and contents insurance
- Regular monthly fixed price advert in local free newspaper
- Annual listing fee for Yellow pages
- Weekly newspaper/magazine bill for salon customers waiting area.
- Wages of salon cleaner
- Window cleaner
- Telephone bill
- Salon products for hairdressing services e.g. shampoo, styling
products, colours etc.
- Salon staff wages (trained and casual staff)
(b) Producing a break-even chart from budgeted data
Now they understand the difference between fixed and variable costs at your next
meeting you will explain how to calculate break-even.
You decide to use the following break-even case study for Headliners Hair Salon (a
business similar to that proposed by Emma and John) shown below, to demonstrate
the use of break-even to Emma and John.
Headliners case study: break-even information
Headliners Hair Salon is expanding their range of services by launching a beauty
treatment (nail manicure). They will rent an additional part of the building, in which
they are currently based, and need to know how many treatments they need to sell in
order to break-even. This information is needed to support their application to the
bank for finance to fund this project. The following data is available:
Variable costs
 Direct materials – £2.50 per unit/manicure
 Direct labour – £6.50 per unit/ manicure
Fixed costs specific to the new product - £10,000 per annum
Planned selling price – £15.00 per unit/ manicure
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4. The maximum output is 2000 units (manicures) per annum
(i) Use the above data to construct a table to provide the data for a break-even chart
(ii) Produce a hand drawn break-even chart. This must be
correctly labelled with axis labels, line labels, the break-even
point and areas of profit and loss
(iii) Market research with existing customers has suggested that the forecast sales
figure should be based on 1800 manicures per annum.
Show the Margin of Safety on your break-even chart for this forecasted operating
point.
(c) An explanation of break-even analysis and the role it plays in
the financial planning of a business.
(i) Use the chart to read off an estimate of the break-even point in:
• Units, and
• sales revenue (£’s) and write these figures down.
(ii) Calculate the Margin of Safety in:
• Units, and
• sales revenue (£’s) – write these figures down clearly showing your
working for this task.
(iii) Explain why it is important to estimate the break-even point and margin of
safety for a new business or a new business project
(iv) briefly explain why controlling costs would be important in relation to the
break-even point and margin of safety of the business
(d) A description of budgets and budgeting.
Emma and John have no experience in dealing with costs and budgets and would
like some proper advice and guidance about the day-to-day financial management of
their new hair salon. With this in mind, you decide to put together some information
and basic examples on costing and budgeting that can be presented to Emma and
John at a forthcoming meeting.
You have recommended that Emma and John produce the
following budgets:
Sales budget – this will consist of expected income from hairdressing services and
sales of sundry items e.g. shampoo, styling products
Purchases budget – this will consist of salon products for hairdressing services e.g.
shampoo, styling products, colours etc.
Labour (wages) budget – this will consist of salon staff wages (trained and casual
staff) and part-time cleaning staff
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5. Capital expenditure budget – this will show planned spending on assets such as
salon equipment
General expenses budget – this could include all the other running expenses
(overheads) which they expect to have to pay e.g. rent, business rates, insurance,
advertising etc.
All the figures from these individual budgets will then be put into a Cash Budget
(Cash Flow Forecast) which, with other information, will then be used to produce the
Master Budget consisting of a forecast Profit and Loss Account and Balance Sheet.
To John and Emma this looks a lot of work! Your task is to
simply explain why this needs to be done. You want them to
understand the importance of producing costs and budget data
and how to set up a system to make sure it is monitored and
controlled.
Your task is to produce written notes which describe:
(i) the main purposes of budgeting
(ii) how budgets are set. Give examples of the process
Emma and John may use for setting the sales and labour
budgets.
(iii) how a budget is monitored against actual performance
and why it would be important to do this for Emma and
John’s business.
Note: Make sure all your descriptions are relevant to the
Hairdressing business.
Task 6 (M2)
Analyse the reasons why costs and budgets need to be controlled and explain in detail
problems that can arise if they are left unmonitored
Scenario
You continue to work with Emma and John to increase their knowledge and
understanding of the importance of costing and budgeting. You will continue to use
the Headliners case study to illustrate the important learning and advice you are
trying to give.
(a) Break-even analysis
Headliners is aware that the forecasted cost and sales data may
not prove to be accurate and therefore wishes to carry out
further ‘what-if’ analysis to analyse the potential impact of the
following potential changes in costs or the selling price:
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6.  Change in the materials budget e.g. an increase in direct material costs to
£3.00 per unit
 Change in sales budget due to recession e.g. a reduction in selling price to
£14.00 per unit
 Change in costs budget due to increases in Business rates, energy prices
and insurance premiums – This would lead to an increase in fixed costs to
£11,000 per annum
To illustrate the importance of monitoring and controlling costs
(and selling prices) you are to demonstrate the potential impact
on the break-even point of the potential changes by:
1. Working out the break-even point in units and sales revenue
using the formula method, showing your workings for each
calculation **
** Note: For each scenario only the figure stated would
change all other figures would be the same as the original data
shown in the Headliners case study for task 5 (b) – Pass 4 work
2. Commenting on the implications of each possible change for the business based
on the original forecast for break-even and the margin of safety.
(b) Budgets
Four of the main budgets used by Headliners are:
Sales – consists of expected income from hairdressing services and sales of sundry
items e.g. shampoo, styling products
Purchases – consists of salon products for hairdressing services e.g. shampoo,
styling products, colours etc.
Labour (wages) – consists of salon staff wages (trained and casual staff) and part-
time cleaning staff
General expenses budget – this includes all the other running expenses (overheads)
which they expect to have to pay e.g. rent, business rates, insurance, advertising etc.
Shown below are extracts from some of the budgets produced for Headliners which
show a summary of the budgeted figures and the actual figures (each budget is
monitored on a monthly basis).
Sales
Month Budget (£’s) Actual (£’s) Variance Fav or
(Adv)
Total for year 129,000 121,000 (8,000)
Purchases
Budget (£’s) Actual (£’s) Variance Fav or
(Adv)
Total for year 62,000 64,000 (2000)
Labour (wages)
Budget (£’s) Actual (£’s) Variance Fav or
(Adv)
Total for year 22,000 23,000 (1,000)
General Expenses
Total for year Budget (£’s) Actual (£’s) Variance Fav or
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7. (Adv)
Gas and electric 3,600 4,000 (400)
Telephone 600 650 (50)
Advertising 800 850 (50)
Insurance 1000 950 50
Task
With reference to all four budgets briefly explain possible reasons for variances
between the actual and budgeted figures.
(c) Importance of controlling costs and budgets
With particular reference to your answers to task 6 parts (a) and (b) write a detailed
conclusion titled ‘The reasons why costs and budgets need to be controlled’.
Explain in detail how this demonstrates the reasons why techniques such as break-
even analysis and variance analysis need to be used. Analyse the reasons why
costs and budgets need to be controlled and explain in detail problems that can arise
if they are left unmonitored.
Your written work should also show an awareness of how controlling costs and
budgets contribute to:
- The business having sufficient financial resources to pay the people/organisations it
owes money to.
- Planning for capital expenditure e.g. buying assets such as equipment or vehicles,
which may require funding from external sources such as a bank loan.
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8. Part three – Measuring business performance
Another client you are working with is Alison Jones, a sole trader, who trades as
‘Décor 8’ a business selling a range of home furnishing items i.e. furniture, lighting,
luxury wallpaper etc. Alison needs your help to evaluate the performance of her
business over the last two years. She has provided you with a copy of her annual
accounts for 2008 and 2009, (shown in Appendix A).
Task 7 (P5)
Interpret the contents of a given profit and loss account and balance sheet
Alison has kept detailed records of all transactions but has struggled to translate all the pieces
of paper into proper accounting records. You have now completed this process and have
presented her with a copy of her final accounts for 2008 and 2009. You have decided to write
some brief notes to go with the stements wto help her understand what they are showing.
(i) You must provide a brief description/definition of the following items on the profit
and loss accounts of Décor 8 (you should use figures from the accounts for 2009 to
illustrate your answer). This should include:
 Sales
 Cost of goods sold
 Gross profit (including method of calculation)
 Expenses – with brief descriptions of, for example, wages and salaries,
heating and lighting, rent and rates and advertising
 Net profit (including method of calculation)
(ii) You must also provide brief descriptions/definitions of the following items on the
balance sheet (again you should use figures from the accounts for 2008 to illustrate
your answer). This should include:
 fixed assets – with examples
 current assets – with brief descriptions of stock, debtors, bank, cash
 current liabilities – with brief descriptions of creditors, VAT
 long-term liabilities
 owners’ capital. (i.e. all items in ‘Financed by’ section including Capital, Profit
and Drawings)
(iii) Produce written notes which make a broad judgement about how well or badly
Décor 8 is performing. Your writing must use key terms such as sales, gross and net
profit, the value of fixed and current assets and owner’s capital and show clear
evidence that you have looked carefully at the contents of the final accounts for 2008
and 2009.
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9. Task 8 (P6)
Illustrate the financial state of a given business by showing examples of accounting ratios
(i) Calculate the full range of ratios and other performance indicators for the years
2008 and 2009. This should include calculations for:
• Net Profit Percentage
• Current ratio
• Debtors Collection Period, Creditor Payment Period
You must produce a handwritten ‘working sheet’ (a blank copy is available from your
tutor) which clearly shows the actual calculation of each result.
(ii) You should provide a very brief description of the results. This should consist of a
simple statement for each ratio identifying whether the figures show the business in a
worse, better or largely similar light.
Task 9 (M3)
Interpret the contents of a given profit and loss account and balance sheet and explain in
detail how accounting ratios can be used to monitor the financial state of the organisation
(i) You will now carry out a more detailed interpretation of the performance of the
business. Calculate the following additional range of ratios and other performance
indicators for the years 2008 and 2009. This should include calculations for:
• Gross Profit Percentage, Return on Capital Employed
• Acid Test ratio
• Stock Turnover, Asset Turnover
You must produce a handwritten ‘working sheet’ (a blank copy is available from your
tutor) which clearly shows the actual calculation of each result.
(ii) Summarise your ratio results from task 8 and task 9 into a word processed table
i.e. a table which shows the 2008 and 2009 results for Gross Profit Percentage, Net
Profit Percentage, Return on capital employed, Current ratio, Acid test ratio, Debtors
collection period, Creditor Payment Period, Stock turnover, Asset Turnover.
(iii) Provide a detailed explanation of the accounting ratios and how you have used
them to monitor the financial position of Décor 8 over the two-year period.
You should also include a brief summary which makes an overall judgement about
the performance of Décor 8 based on the ratio results.
Support your answer by showing an understanding of how changes in certain figures
in the final accounts over the two years may have contributed to the financial position
of the business.
Task 10 (D1)
Evaluate how managing resources and controlling budgets can improve the performance of a
business
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10. Using appropriate examples for Games Workshop and the assignment case study
material you are to evaluate how managing financial resources and controlling
budgets can improve the performance of a business.
Your work should include an evaluation of how business performance can be
improved through effective management of resources i.e. human, physical and
technological, and controlling budgets.
You should think very carefully about the pass and merit assessment work you have
completed and evaluate the systems and techniques used by organisations to
monitor and improve performance.
Task 11 (D2)
Evaluate the adequacy of accounting ratios as a means of monitoring business health in a
selected organisation, using examples
You should give an evaluation of the use and adequacy (e.g.
limitations) of the accounting ratios as a means of monitoring the
financial health of the business and relate this to the ratio
analysis you have undertaken.
Justify how this information could be used by the business to
monitor business health and improve business performance.
.
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11. Appendix A
Décor 8: Trading and Profit and Loss accounts for the years ended 30 June
2008 2009
£ £ £ £
Sales (20% credit sales for 105000 113220
both years)
Opening stock 4870 5200
Purchases (all on credit) 50100 60050
54970 65250
Closing stock 5200 6850
Cost of goods sold 49770 58400
Gross Profit 55230 54820
Expenses
Wages and salaries 9900 10400
Rent and rates 4850 5120
Heating and lighting 4070 4160
Advertising 3000 2800
Telephone; Printing; Stationery 2180 2040
Interest and bank charges 1050 1150
Other overhead expenses 10450 11460
Depreciation
Premises 1100 1100
Fixtures and Fittings 3200 3500
Motor Vehicles 2800 42600 3800 45530
Net Profit 12630 9290
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12. Décor 8: Balance Sheets as at 30 June
2008 2009
£ £ £ £
Fixed Assets
Premises 59500 58400
Fixtures and Fittings 26060 22560
Motor Vehicles 11200 7400
96760 88360
Current Assets
Stock 5200 6850
Debtors 2100 2480
Bank 150 1410
Cash 50 300
7500 11040
Current liabilities
Creditors 4570 5260
VAT 430 490
5000 5750
Working Capital 2500 5290
99260 93650
Long-term liabilities
Long-term loan 10000 10000
Net Assets 89260 83650
Financed by:
Capital as at 1 July 89000 89260
Net profit 12630 9290
101630 98550
Drawings 12370 14900
Capital as at 30 June 89260 83650
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