BUSS2 May 2011 - The scandal of Question Q1 (a) (ii) (updated)

How on earth is this allowed to happen? A seemingly innocuous calculation (and worth just 3 marks) confused, distracted and distressed thousands of students in the AQA AS Business Studies BUSS2 exam on 24 May 2011. Set out are the details of the original mistake and subsequent updates as the story has developed.

As you can see, the BUSS2 paper has become somewhat of a soap opera and I’m conscious of the very strong feelings that many teaching colleagues have about the very poor standard of this paper. I’m also grateful for the support that many of you have provided to me as I have tried to get to the bottom of what went wrong. I think its fair to say that AQA are not best-pleased with this blog entry, but i felt strongly that the issue should be given a public airing. I am the biggest supporter of the AQA GCE Business Specification, as many of you who have attended our events will know. But I hate it when colleagues, and perhaps most importantly students, are let down.

[UPDATE 6:]

The investigations department at Ofqual have informed me (10 June 2011) that AQA are aware of TWO separate errors in the BUSS2 paper - not just one. The AQA letter sent to centres makes reference to only one error.

[UPDATE 5]:

The BBC called me this morning and asked me to participate in a BBC 5Live discussion about the exam paper errors. The discussion starts at 11.11 on the iPlayer link below. The lady from Ofqual was understandably a little defensive since they have only just begun their investigation into the growing number of exam paper errors at AS / GCSE. However, I was not convinced with her suggestion that Ofqual might remove AQA, OCR & Edexcel’s powers as Awarding Bodies for continued errors! I suspect Pearson’s legal team would have fun if it tried!

http://www.bbc.co.uk/iplayer/console/b011p1p9

[UPDATE 4]:

AQA has issued the following letter to centres who entered students for BUSS2 May 2011. Many thanks to the many colleagues who have sent me a copy.
AQA_Question_Paper_Error_BUSS2_June_2011.pdf

[UPDATE 3]:

I believe that there is another problem with this paper -arising from the same case study. Question 1(c) also contains an problem which results from a fundamental misunderstanding of the Divine chocolate business model and structure.

The 13 mark question 1(c) asks the students to “consider whether Divine has made the right decision to use Kuapa Kokoo as it major supplier of cocoa beans?” A full evaluative answer is required.

This is a nonsense question. As anyone who has heard Sophie Tranchell tell the story of Divine will know, Divine (as it is now called) was actually set up by the Kuapa Kokoo cooperative. Divine exists to distribute KK-sourced chocolate products. There was no “decision” by Divine!. KK is not a major supplier - it is THE supplier. Kuapa also sells to other fair trade buyers in Europe and a small proportion of cocoa beans are sourced from other collectives. But the fact remains that 1(c) is wrong - an awful question.

[UPDATE 2]:

AQA apologise http://www.telegraph.co.uk/education/educationnews/8560050/Second-impossible-question-set-in-A-level-exam.html

[UPDATE 1:]

I’m informed that the draft mark scheme for this paper asks examiners to credit the [incorrect] use of the “over $1million” figure referred to in the case study as the numerator in a ROC calculation. i.e. the marks were to be awarded for an incorrect calculation. The draft mark scheme made no mention of the error in this question. A revised mark scheme may be issue - examiners on BUSS2 have been instructed to await further instructions]

Here is a link to my copy of the exam paper. Many thanks to all the colleagues who have sent it to me already!
BUSS2May2011Paper.pdf

The case study for Question 1 of the paper was on Divine Chocolate - a business with which readers of this blog and delegates to our conferences will be very familiar. Financial information about Divine Chocolate’s UK-registered company was provided in Figure 1 together with some supporting narrative which formed the background for the questions asked about Divine.

The first two parts of Q1, typically for BUSS2, were once again calculations. The net profit margin calculation was straightforward. £0.57m profit / £12.38m revenues = a 4.6% net profit margin. Simples. 2 marks. Thanks. Students were up and running, and into the paper.

Then came the hammer blow. Question Q1 (a) (ii); repeated in full below:

[from the case study narrative]
Divine Chocolate has established a separate company in the USA [our emphasis: i.e. not connected with the company or figures provided in figure 1] which achieved sales of over $1 million in its first year.

[the question]
Assuming an investment of £12.5 million was required to establish the separate Divine Chocolate company in the USA, calculate the return on capital achieved duing its first year of operation.

So, a simple return on capital calculation was required…but in relation only to the Divine USA business.

The problem? You simply can’t calculate it with the data provided!

The only possible response to the question is to write that it is not possible to calculate ROC for the USA company, since we are not told what profit (return) it made it the first year.

Did the Examiner mean to write ...“which achieved a profit of over $1 million in its first year”. Possibly - though even that would have been unhelpful. But he didn’t. A shocker.

Did the examiner want students to calculate ROC by dividing the first year revenue ($1million+) by the capital investment? Possibly, but that is a significant error which betrays a total misunderstanding of the required calculation. Surely no Examiner (or other people scrutinising the paper prior to authorisation & printing) would have let that slip through.

A final possibility? Did the Examiner intend candidates to use the 4.6% net profit margin earned by the UK business to estimate Divine USA’s first year profit? I hope not - that would be a joke. It is simply not appropriate to assume that the separate USA company would make a similar net profit margin (i.e. 4.6%) as the UK; different market; first year of trading - so likely to be incurring substantial opening costs etc. It is highly unlikely that Divine’s USA company would have made a profit in Year 1!

None of these possible explanations are plausible.

The key point is that students were being asked to spend 3-4 minutes trying to perform a calculation they simply couldnt do with the information provided in the paper.

Less confident students might have given up quickly and moved on.

But we already know of several students chasing the top marks who spent an inordinate amount of time scouring the exam paper for the data to be able to complete the calculation. They wasted 10-15 minutes in a time-pressured exam and had to handle the remaining questions in an agitated state of mind. The online bulletin boards are packed with students raging against the unfairness of the exam paper.

look at this quote from one of the affected students sent to me via email tonight:

“Started off really well with a bang and confident that I’d do well. Then came the killer blow, I wasted quite a bit of time looking for the information, and how I answered in the latter stages were in an agitated nervous manner. What makes it worse is that not only did they not give the net profit, they also expressed it as ‘over’ $1 million. Even if they gave that as net profit it is still confusing for people!”

That simply isn’t fair on the students. An inexcusable error has put a significant number of students at a disadvantage.

We’ve waxed lyrical here on the business studies blog about our support for this specification - how the AQA GCE Business Specification is the gold standard for A Level Business - significantly more challenging than the other “soft” boards.

However, this kind of error raises questions about AQA’s standards for this exam. Every student who took BUSS2 yesterday - and all their supportive teachers - deserve an explanation and an apology.