Apna CareerApna CareerApna Career
CBSE PRACTICE PAPER 2026–27 · BUSINESS STUDIES (SET – 2)
General Instructions
- This question paper contains 31 questions. All questions are compulsory. (Theory : 80 marks; Project : 20 marks is assessed separately.)
- Section A : Q. 1 to 14 are MCQs and Q. 15–16 are Assertion–Reason questions, 1 mark each (16 marks).
- Section B : Q. 17 to 20 are short answer questions of 3 marks each (12 marks). Answer in about 60–80 words.
- Section C : Q. 21 to 23 are short answer questions of 4 marks each (12 marks). Answer in about 80–100 words.
- Section D : Q. 24 to 27 are long answer questions of 5 marks each (20 marks). Answer in about 120 words.
- Section E : Q. 28 and Q. 29 are long answer questions of 6 marks each (12 marks). Answer in about 150 words.
- Section F : Q. 30 and Q. 31 are case-based questions of 4 marks each, with four sub-parts of 1 mark each (8 marks).
- The paper follows the CBSE 2025–26 design : Part A (Principles and Functions of Management) 50 marks and Part B (Business Finance and Marketing) 30 marks; typology 40% remembering/understanding, 30% applying, 30% analysing/evaluating. Internal choice (OR) is provided in some questions.
- The paper is of higher difficulty level and is competency based : questions are set in real-life situations that test application, analysis and evaluation. A detailed marking rubric and Answer Key are given at the end of this paper.
SECTION A (16 × 1 = 16 Marks)
Q. 1 to Q. 14 : Multiple Choice Questions (choose the correct option)
1. A manager in a textile firm decides what work is to be done, motivates the workers and also looks after the day-to-day operations of the factory. This shows that management is
(a) an exact science(b) multidimensional(c) a tangible force(d) a one-dimensional activity
2. Rahul, a branch manager of a bank, interprets the policies framed by the Board of Directors, assigns duties to section heads and coordinates between top management and supervisors. He works at the
(a) top level of management(b) supervisory level of management(c) middle level of management(d) operative level
3. In a company, the Purchase Head contacts the Sales Head directly in an urgent matter, without going through the Chief Executive, and informs the Chief Executive afterwards. This direct link is known as
(a) gang plank(b) esprit de corps(c) equity(d) initiative
4. A firm fixes the standard time for a job by observing a skilled worker with a stopwatch. This technique of scientific management is
(a) motion study(b) fatigue study(c) method study(d) time study
5. A government ban on single-use plastic compels a snack company to change its packaging material. This change is due to the
(a) social environment(b) legal and political environment(c) economic environment(d) technological environment
6. Which one of the following is different from the other three?
(a) Budget(b) Policy(c) Procedure(d) Method
7. A manager assigns a task to his subordinate but does not give him the right to take decisions required for the task. Which element of delegation is missing?
(a) Responsibility(b) Accountability(c) Delegation itself(d) Authority
8. A company fills a vacant managerial post by promoting a deserving supervisor. A merit of this source of recruitment is that
(a) it brings fresh talent and new ideas(b) it widens the choice of candidates(c) it improves the morale of existing employees(d) it avoids any need for training
9. The IT head uses technical jargon while giving instructions, and the finance staff are unable to understand them. This is an example of
(a) psychological barrier(b) semantic barrier(c) organisational barrier(d) personal barrier
10. A company reviews only those deviations from the budget that exceed 10% of the budgeted figure. The principle of controlling applied is
(a) critical point control(b) budgetary control(c) ratio analysis(d) management by exception
11. A company raises part of its capital through debt and, as its return on investment is higher than the rate of interest, its earnings per share increase. This is an example of
(a) trading on equity(b) working capital management(c) dividend decision(d) floatation of securities
12. Which one of the following is different from the other three?
(a) Initial public offer(b) Rights issue(c) Private placement(d) Trading of shares on the NSE
13. A firm first studies what consumers want through market research, and only then decides what to produce. The marketing management philosophy followed is the
(a) production concept(b) product concept(c) marketing concept(d) selling concept
14. The apex consumer redressal agency at the national level under the Consumer Protection Act, 2019 is
(a) the District Commission(b) the National Consumer Disputes Redressal Commission(c) the State Commission(d) the Central Consumer Protection Authority
Q. 15 and Q. 16 : Assertion–Reason Questions
Options: (a) Both A and R are true and R is the correct explanation of A. (b) Both A and R are true but R is not the correct explanation of A. (c) A is true but R is false. (d) A is false but R is true.
15. Assertion (A): Planning is a continuous process.
Reason (R): Planning is a forward-looking function concerned with the future.
Reason (R): Planning is a forward-looking function concerned with the future.
16. Assertion (A): Sales promotion creates long-term brand loyalty without using any short-term incentives.
Reason (R): Sales promotion consists of short-term incentives such as discounts, rebates and free samples.
Reason (R): Sales promotion consists of short-term incentives such as discounts, rebates and free samples.
SECTION B (4 × 3 = 12 Marks) — Short Answer Questions
17. Identify the technique of scientific management (given by F. W. Taylor) used in each situation and explain it in one or two lines : (i) A firm fixes eight specialists for a department – four who plan the work and four who supervise execution on the shop floor; (ii) A firm determines the time taken by a skilled worker to complete a job with a stopwatch to set the standard time; (iii) Workers completing more than the standard output are paid a higher rate per unit for all units.(3)
18. A company’s productivity fell although its plans were excellent. The Chairman felt that the “directing” function was weak. Explain any three points of importance of directing to support the Chairman’s view.(3)
19. SEBI performs three types of functions. State any one function under each type with an example.(3)
20. A fitness brand advertises : “Lose 10 kg in 7 days”, supported by fake testimonials. Name the authority that can act against it, the type of unfair practice involved and any two actions that the authority can take.(3)
SECTION C (3 × 4 = 12 Marks) — Short Answer Questions
21. “Management does not fully satisfy all the features of a profession.” Explain any four points to justify the statement.(4)
22. Identify the incentive in each situation : (i) A company distributes 10% of its annual profit among its employees; (ii) Senior employees are given a company car and free housing; (iii) A retail chain declares an “Employee of the Month” and displays the photograph at the entrance; (iv) A clerk’s job is redesigned to include planning and decision-making responsibility. Also state whether it is a financial or a non-financial incentive.(4)
23. A company has a capital of ₹ 20,00,000. Plan I : all equity. Plan II : equity ₹ 10,00,000 and 12% debt ₹ 10,00,000. Ignoring tax, calculate the Return on Equity (ROE) under both plans if EBIT is (a) ₹ 3,00,000 in a good year and (b) ₹ 1,00,000 in a bad year. What do your answers show about the use of debt?(4)
SECTION D (4 × 5 = 20 Marks) — Long Answer Questions
24. “ThreadCo”, a fashion start-up, has grown from 10 to 300 employees in three years. Its founder faces confusion in work, delays in decisions and low morale. Advise the founder how he can apply any five of Fayol’s principles of management (name the principle and state how it will help).(5)
25. Explain any five qualities of a good leader.(5)
26. Explain any five points of importance of controlling.(5)
27. Explain any five factors that affect the price of a product.(5)
SECTION E (2 × 6 = 12 Marks) — Long Answer Questions
28. Examine any six limitations of planning and suggest, for each, how a manager can reduce its effect.(6)
OR
Distinguish between centralisation and decentralisation on any six points.
29. Compare the working capital requirements of a bakery and of a heavy-machinery manufacturer on any six factors.(6)
OR
Distinguish between the primary market and the secondary market on any six points.
SECTION F (2 × 4 = 8 Marks) — Case-Based Questions
30. Read the case and answer the questions.
“UrbanBasket” is a fast-growing grocery chain with dark stores in 12 cities. Its management has laid down a rule that every customer complaint must be resolved within 24 hours. The chief executive has authorised each store manager to sanction refunds up to ₹ 500 without taking approval from the head office, while the head office plans yearly targets for all stores. When a rival chain started a heavy discount war, UrbanBasket had to quickly revise its plans, as such changes keep occurring in the market.
“UrbanBasket” is a fast-growing grocery chain with dark stores in 12 cities. Its management has laid down a rule that every customer complaint must be resolved within 24 hours. The chief executive has authorised each store manager to sanction refunds up to ₹ 500 without taking approval from the head office, while the head office plans yearly targets for all stores. When a rival chain started a heavy discount war, UrbanBasket had to quickly revise its plans, as such changes keep occurring in the market.
(i) Name the type of plan represented by the 24-hour complaint rule and give one reason. (1)
(ii) Identify the concept of organising reflected in the authorisation to store managers and state one benefit of it. (1)
(iii) Identify the feature of the business environment reflected in the last sentence. (1)
(iv) Identify the feature of planning illustrated by the head office planning targets for all stores and the store-level plans. (1)
(4)31. Read the case and answer the questions.
“NutriBite” launches an energy bar. The company distributes free samples at gyms, uses fitness influencers on social media and offers “buy 2, get 1 free” for the first month. The bar is sold in an attractive, tamper-proof wrapper that lists ingredients, calories, price and expiry date. Though competitors charge ₹ 50, NutriBite sets its price at ₹ 40 to capture the market quickly.
“NutriBite” launches an energy bar. The company distributes free samples at gyms, uses fitness influencers on social media and offers “buy 2, get 1 free” for the first month. The bar is sold in an attractive, tamper-proof wrapper that lists ingredients, calories, price and expiry date. Though competitors charge ₹ 50, NutriBite sets its price at ₹ 40 to capture the market quickly.
(i) Name any two elements of the promotion mix used by NutriBite. (1)
(ii) Identify the pricing objective reflected in the last sentence. (1)
(iii) State the function of labelling that is reflected in the wrapper’s information. (1)
(iv) Which factor affecting price, other than competition, would NutriBite have to consider before fixing ₹ 40? Give one reason. (1)
(4)ANSWER KEY & MARKING RUBRIC · BUSINESS STUDIES PRACTICE PAPER (SET – 2)
Note for evaluators : Marks are awarded against the rubric criteria below. Award marks for any other relevant and correct point. Credit is given for the application of the concept to the situation (competency) and not only for recall of definitions.
SECTION A — Answer Key (1 mark each)
| Q.1 | (b) | Q.2 | (c) | Q.3 | (a) | Q.4 | (d) |
| Q.5 | (b) | Q.6 | (a) | Q.7 | (d) | Q.8 | (c) |
| Q.9 | (b) | Q.10 | (d) | Q.11 | (a) | Q.12 | (d) |
| Q.13 | (c) | Q.14 | (b) | Q.15 | (b) | Q.16 | (d) |
Reasoning for Q.1–16. (1) Work + people + operations ⇒ multidimensional. (2) Interprets top-level policies, assigns duties to supervisors ⇒ middle level. (3) Direct link between equals in different departments, informing seniors later ⇒ gang plank (an exception to scalar chain). (4) Stopwatch to fix standard time ⇒ time study. (5) Government ban ⇒ legal and political environment. (6) Policy, procedure and method are standing plans; a budget is a single-use plan. (7) Responsibility is given, but the right to decide (authority) is missing. (8) Promotion boosts morale of existing staff. (9) Jargon ⇒ semantic barrier. (10) Only large deviations are reviewed ⇒ management by exception. (11) ROI > interest ⇒ trading on equity. (12) IPO, rights issue and private placement are primary market methods; trading on the NSE is the secondary market. (13) Research first, then production ⇒ marketing concept. (14) NCDRC is the national-level commission. (15) (b) : both true, but forward-looking nature does not explain continuity. (16) (d) : A is false (sales promotion is short-term), R is true.
SECTION B — Marking Rubric (3 marks each)
17.
Technique identified (½) + explanation (½) for each.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| (i) Functional foremanship | Identifies functional foremanship; explains : 8 specialists – 4 in the planning department (route clerk, instruction card clerk, time and cost clerk, disciplinarian) and 4 in the production department (speed boss, gang boss, repair boss, inspector) | 1 |
| (ii) Time study | Identifies time study; explains : determining standard time required for a job with a stopwatch, to fix a fair day’s work | 1 |
| (iii) Differential piece wage | Identifies differential piece wage system; explains : two rates – higher for efficient workers (at or above standard) and lower for others; motivates efficiency | 1 |
18.
Any three points; each must be linked to the fall in productivity.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| Point 1 (1) | Initiates action – directing starts the work of the plan; productivity cannot rise unless people start working | 1 |
| Point 2 (1) | Integrates efforts – through supervision, communication and leadership, efforts of individuals are channelised towards the common goal | 1 |
| Point 3 (1) | Means of motivation – incentives and leadership make employees give their best; or facilitates change – through communication and motivation; or provides stability and balance | 1 |
19.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| Regulatory function | Any one with example : rules and regulations for stock exchanges; registration of brokers, merchant bankers; registration and regulation of mutual funds; regulating takeovers (e.g. registering a new broker) | 1 |
| Developmental function | Any one with example : training of intermediaries; investor education; flexible approach to the market; promoting self-regulatory organisations (e.g. investor awareness programmes) | 1 |
| Protective function | Any one with example : prohibiting insider trading, fraudulent and unfair trade practices, price rigging; protecting investors from preferential allotment (e.g. action against insider trading) | 1 |
20.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| Authority | Central Consumer Protection Authority (CCPA), set up under the Consumer Protection Act, 2019 | 1 |
| Type of practice | Misleading advertisement – an unfair trade practice (false claim with fake testimonials) | 1 |
| Any two actions | Investigate the complaint; order discontinuation of the advertisement / modify it; recall of goods / refund; impose a penalty on the manufacturer or endorser; prohibit the endorser from endorsing for a period | 1 (½ + ½) |
SECTION C — Marking Rubric (4 marks each)
21.
Any four points; each with a reason.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| Point 1 | Restricted entry – a profession needs a prescribed degree/qualification, whereas anyone can become a manager without a specified degree | 1 |
| Point 2 | Professional association – doctors/lawyers must be members; managers need not be members of AIMA or other bodies | 1 |
| Point 3 | Code of conduct – professions have a binding ethical code; managers’ code is only advisory and is not binding | 1 |
| Point 4 | Service motive – a profession aims at service; managers work primarily for profit/targets. (or well-defined body of knowledge exists but is not essential for entry) | 1 |
22.
Incentive (½) + nature (½) for each.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| (i) | Profit sharing – financial incentive | 1 |
| (ii) | Perquisites (fringe benefits) – financial incentive | 1 |
| (iii) | Status / employee recognition – non-financial incentive | 1 |
| (iv) | Job enrichment – non-financial incentive | 1 |
23.
(Calculation 3 : 2 + 1) Inference (1) : Debt magnifies the return when ROI (15%) is higher than the interest rate (12%) – trading on equity – but it magnifies the loss when ROI (5%) is lower than the interest rate; so debt raises both return and financial risk.
| Particulars | Plan I (₹) | Plan II (₹) |
|---|---|---|
| Equity | 20,00,000 | 10,00,000 |
| Debt @ 12% | 0 | 10,00,000 |
| (a) Good year : EBIT | 3,00,000 | 3,00,000 |
| Less : Interest | 0 | (1,20,000) |
| Earnings for equity | 3,00,000 | 1,80,000 |
| ROE | 15% | 18% |
| (b) Bad year : EBIT | 1,00,000 | 1,00,000 |
| Less : Interest | 0 | (1,20,000) |
| Earnings for equity | 1,00,000 | (20,000) |
| ROE | 5% | −2% |
SECTION D — Marking Rubric (5 marks each)
24.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| Any five principles | Each principle correctly named (½) and applied to ThreadCo (½) | 5 (1 × 5) |
| Illustrations | Division of work – specialists for design, stitching, marketing; Unity of command – one boss for each employee to avoid confusion; Discipline – clear code of conduct; Initiative – reward suggestions to speed up decisions; Equity – fair and kind treatment to raise morale; Remuneration – fair pay; Order – right person at right place; Esprit de corps – team spirit; Scalar chain/gang plank – quick communication |
25.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| Any five qualities | (1) Physical features – height, health, voice; (2) Knowledge – job and organisation; (3) Integrity – honesty, ethical standards; (4) Initiative – seizing opportunities; (5) Communication skills; (6) Motivation skills; (7) Self-confidence; (8) Decisiveness; (9) Social skills | 5 (name ½ + explanation ½ for each) |
26.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| Any five points | (1) Accomplishing organisational goals – points out deviations and guides corrective action; (2) Judging the accuracy of standards – reviews standards in the light of changes; (3) Making efficient use of resources; (4) Improving employee motivation – known standards and fair appraisal; (5) Ensuring order and discipline – reduces dishonest behaviour; (6) Facilitating coordination in action | 5 (1 × 5) |
27.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| Any five factors | (1) Product cost – fixed, variable, semi-variable; the price must cover cost; (2) Utility and demand – customers’ perceived value; (3) Extent of competition; (4) Government and legal regulations – e.g. price control; (5) Pricing objectives – profit maximisation, market share, survival; (6) Marketing methods used – distribution, advertising | 5 (name ½ + explanation ½ for each) |
SECTION E — Marking Rubric (6 marks each)
28.
OR
(Any six points, 1 mark each)
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| Six limitations with remedies | (1) Rigidity – review plans regularly; (2) Dynamic environment – prepare contingency/flexible plans and scan the environment; (3) Reduces creativity – participative planning, involving lower levels; (4) Huge cost – cost–benefit analysis before planning; (5) Time consuming – set deadlines, appoint a planning team; (6) No guarantee of success – monitor and follow up continuously | 6 (limitation ½ + remedy ½ for each) |
| Basis | Centralisation | Decentralisation |
|---|---|---|
| Meaning | Authority is concentrated at the top | Authority is systematically dispersed to lower levels |
| Decision-making | Slow; top managers decide | Quick; decisions are taken at the lower level |
| Burden on top management | Heavy | Reduced – free for strategic matters |
| Initiative of subordinates | Limited | Developed; training for future managers |
| Control | Easy | Difficult |
| Suitable for | Small firms / crisis | Large firms with diverse operations |
29.
OR
(Any six points, 1 mark each)
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| Six factors compared | (1) Nature of business – bakery sells on cash, low stock; machinery firm needs more raw material and WIP; (2) Production cycle – bakery : hours; machinery : months, so more working capital; (3) Credit allowed – bakery mostly cash sales; machinery sells on credit, locking funds; (4) Scale of operations; (5) Business cycle / seasonality – bakery has festival peaks; (6) Credit available from suppliers; (7) Operating efficiency; (8) Inflation | 6 (comparison on each factor 1) |
| Basis | Primary market | Secondary market |
|---|---|---|
| Nature | New securities are issued for the first time | Existing securities are bought and sold |
| Who receives the funds | The issuing company | The selling investor, not the company |
| Methods | IPO, FPO, rights issue, private placement, offer for sale | Trading on a stock exchange through brokers |
| Price determination | Fixed by the company (with merchant bankers) | Determined by demand and supply |
| Role | Capital formation | Liquidity and marketability |
| Location | No fixed place | Stock exchange (e.g. NSE, BSE) |
SECTION F — Marking Rubric (4 marks each)
30.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| (i) | Policy (standing plan) – a general guideline for decisions that applies repeatedly to all complaints | 1 (½ + ½) |
| (ii) | Decentralisation / delegation of authority – benefit : quick decisions, relieves top management, develops managers (any one) | 1 (½ + ½) |
| (iii) | Dynamic nature – the business environment keeps changing (also uncertainty) | 1 |
| (iv) | Planning is pervasive – done at all levels (head office and stores) and in all departments | 1 |
31.
| Rubric criterion | Expected response (key points) | Marks |
|---|---|---|
| (i) | Any two : sales promotion (free samples, buy 2 get 1 free); advertising/publicity through social media influencers; (personal selling at gyms) | 1 (½ + ½) |
| (ii) | Market share leadership / capturing the market (penetration pricing) | 1 |
| (iii) | Provides information about ingredients, calories, price and expiry; (also helps in identification and legal compliance) | 1 |
| (iv) | Any one with reason : product cost – the price must cover the cost of production; utility and demand – customers must perceive value; government regulation | 1 (½ + ½) |
DESIGN OF THE PAPER — Unit-wise Weightage and Typology (as per CBSE 2025–26)
| Part / Units | Marks (CBSE) | Marks in this paper | Questions |
|---|---|---|---|
| Part A – Units 1–2 : Nature and Significance of Management; Principles of Management | 16 | 16 | Q.1, 2, 3, 4, 17, 21, 24 |
| Units 3–5 : Business Environment; Planning; Organising | 14 | 14 | Q.5, 6, 7, 15, 28, 30 |
| Units 6–8 : Staffing; Directing; Controlling | 20 | 20 | Q.8, 9, 10, 18, 22, 25, 26 |
| Total – Part A | 50 | 50 | |
| Part B – Units 9–10 : Financial Management; Financial Markets | 15 | 15 | Q.11, 12, 19, 23, 29 |
| Units 11–12 : Marketing Management; Consumer Protection | 15 | 15 | Q.13, 14, 16, 20, 27, 31 |
| Total – Part B | 30 | 30 | |
| Grand total | 80 | 80 |
| Typology of questions | Marks (CBSE) | Marks in this paper | Questions |
|---|---|---|---|
| Remembering and Understanding | 32 (40%) | 32 | Q.1, 2, 4, 7, 8, 13, 14, 18, 19, 21, 25, 26, 27 |
| Applying | 24 (30%) | 24 | Q.3, 5, 9, 10, 11, 17, 20, 22, 23, 24 |
| Analysing, Evaluating and Creating | 24 (30%) | 24 | Q.6, 12, 15, 16, 28, 29, 30, 31 |
| Total | 80 (100%) | 80 |
