BEP 20 Exam Review Guide

Exam Review Guide - BEP 20

• Exam dates: January 28th, 2025
• Exam format: Multiple choice, true/false, matching, short answer, accounting
• Exam location and time: C116, 8:30 AM
• Materials allowed: Pencil, pen, water bottle
• No smart devices permitted; place them in lockers before the exam.

Needs vs. Wants

• Needs: Essential for survival (water, shelter, food)

• Wants: Desires that can be lived without

• Profit equation: Revenue - Expenses

• Example profit calculation (kilt pins): 3(price)−3 (price) - 3(price)−1.94 (cost) = $1.06 (profit)

• Main reasons for business existence:

  • Provide goods/services
  • Generate profit

Demand

• Demand: The amount consumers are willing to buy at a given price.
• Law of Demand: As price decreases, demand increases, and vice versa.
• Pricing factors affecting demand: Price positioning, Price sensitivity, Price of related/substitute goods.
• Non-pricing factors affecting demand: Personal/household income, new technology, advertising/promotion, fads/trends
• Target market sensitivity to price: Students may prefer cheaper items instead of more expensive ones
  • Substitute goods: These are products that can replace each other, for example, running shoes and jeans.

Supply

• Supply: The amount of a product or service a business is willing to provide at a range of prices that consumers are willing to pay.
• Law of supply: As price increases, supply increases, and vice versa.
• Pricing factors affecting supply: Pricing procedures, Keeping/creating market/loss leader.
• Non-pricing factors affecting supply: Capacity, shortage of essential supplies from other producers

Profit vs. Not-for-Profit Businesses

• Profit businesses: Aim to make profit
• Not-for-profit businesses: Aim not to make profit, rely on donations or government funding

Market Forces

• Market forces: Factors influencing price and quantity of goods/services (competition, consumer preferences, technology, economic growth, government regulations).

Business Ownership

• Different forms of business ownership: Corporations, sole proprietorships, partnerships, franchises, cooperatives
• Advantages and disadvantages of each ownership type
• Subcategories of business ownership: Crown corporations, public corporations, private corporations

Business Industries

• Primary industries: Extract or produce raw materials (e.g., agriculture, mining)
• Secondary/processing industries: Transform raw materials into finished products
• Tertiary/service industries: Provide services (e.g., retail, healthcare)
• Business-to-business (B2B)
• Business-to-consumer (B2C)

Ethics

• Ethics: Moral principles guiding right and wrong.
• Ethical behavior: Honest, fair, and respectful treatment.
• Legal, absolute, situational values: Legal values are based on laws, absolute values are unchanging, and situational values depend on circumstances.
• Reasons business ethics are sometimes seen as oxymoronic: Profit-driven nature of business

Corporate Social Responsibility (CSR)

• CSR: Principles and practices to enhance community well-being
• Stakeholders: Individuals or groups affected by a company
• Reasons for the CSR movement: Businesses wanting to be more socially responsible with their communities.

Competitive Markets

• Types of competitive market structures: Perfect competition, monopoly, monopolistic competition, oligopoly.
• Competitive advantages: Perfect competition - products are similar in nature; Monopoly - One seller with significant barriers to entry; Monopolistic competition - Many sellers competing with differentiating factors; Oligopoly - Few large sellers dominate the market.

Business Leadership and Management

• Levels of management: Corporate, middle, department
• Management duties: Planning, organizing, leading, controlling

Project Management

• Project management: Planning and organizing resources to complete tasks
• KPIs: Key productivity indicators

Production

• Methods of improving production: Capital investments, technological improvements, inventory systems (JIT), training, and safety measures

Marketing

• Consumer demographics: Age, gender, ethnicity, income level psychographics
• Consumer interests: Personalities, beliefs, lifestyles, opinions and attitudes
• Indirect competitors: Companies selling different products
• Direct competitors: Companies selling similar products
• Factors used to increase market share: Increased market size, acquiring competitors sales.
• The 4Ps: Product, pricing, promotion, placement

Human Resources (HR)

• Duties of a HR professional: Recruitment, planning for staffing needs, developing employees, performance appraisals.
• Employee retention strategies: Competitive compensation, health and safety, wellness, career development.
• Employee departures: Voluntary departure, Dismissal, Retirement
• Responsibilities and rights of employers and employees.

Accounting

• Financial vs. Managerial Accounting: Summarizing and reporting, and interpreting/communicating to managers.
• Balance sheets: A snapshot of a company’s financial position at a specific point in time
• Income Statements: Indicate financial performance over a specified period.