AS 92029 Annotated exemplars

This annotated exemplar is intended for teacher use only. Annotated exemplars consist of student evidence, with commentary, to explain key parts of a standard. These help teachers make assessment judgements at the grade boundaries.

Download all exemplars and commentary [PDF, 691 KB]

Level 1 Commerce assessment resources (external link) - NCEA.education

For Achieved, the student needs to demonstrate understanding of price determination for an organisation.

This involves using financial or non-financial information to describe how a price has been determined, using a model or concept.

This student has used financial information (costing of 48c plus markup of 300%) to support their price of $2.00 for a lolly bag. The student explained that they have rounded their price from $1.92 to $2.00 because it is easier for a cash only market day, as no change would be required. A table was provided to show the costs, mark-up, and selling price. An income statement showed the sales, cost, and projected profit. Sales volumes were estimated from market research.

For Merit, the 10% tax was accurately applied to the projected income statement showing sales at a price of $2.00, and the impact on profit was correctly explained. However, to gain the grade, two pricing options chosen from changing (increase/decrease) or not changing the price should be explained. The student mentioned a higher price of $2.50, therefore another income statement based on this pricing option, also showing the 10% tax, would have to be included. Evidence would also include information from this income statement in the explanation of the higher pricing option.

For Merit, the student needs to examine price determination for an organisation.

This involves:

• explaining how the price could be affected by a change in an internal or external factor
• explaining options for changing, or not changing, the price
• using financial or non-financial information, and a concept or model to support the explanation. 

This student has explained how the minimum wage increase of $2,000 per worker (i.e. $4,000 for two workers) would increase costs and decrease profit. Four pricing options were considered in response to an increase in the minimum wage, and a decision was made to retain the original price of $38 for a garden service. The pricing options were to keep the original price, a lower price, and two higher prices.

Reworked income statements for all four pricing options were included to reflect the higher minimum wage and its impact on profit and landscape hours. Two pricing options were explained using information from the reworked income statements.    

For Excellence, the student could include in the justification for retaining the original price more reasons supported by financial information from the reworked income statement, rather than focus on comparing to the three other pricing options. Sufficient detail was provided in the explanation of how stakeholders would be impacted.

For Excellence, the student needs to evaluate price determination for an organisation.

This involves:

• justifying the determined price, supported by financial or non-financial information, and a model or concept
• discussing possible consequences of the determined price with reference to impacts on the organisation and its stakeholders. 

This student has responded to the external factor of introducing new technology (a machine that could speed the process of opening mussels) by explaining the impact on production and productivity. The market model was used to demonstrate a shift of supply to the right and the impacts on price, quantity, and equilibrium.    

They considered two pricing options, i.e. changing or retaining the original price of $10 or reducing the price to $9. The justification of the lower pricing option of $9 included reasons why this is the better option, i.e. there is no wastage because the surplus is cleared and revenue and profits increase. The demand and supply model was used in explanations by referring to specific points (price, quantity, surplus, and equilibrium) and calculations of changes in revenue and profit.

The student identified potential consequences on the business: the ability to increase revenue which means she could possibly expand by opening another food truck. She could then employ another staff member and further increase profit and grow the business. They also included a negative consequence of feeling burnt out and tired.

The impact of a price decrease on customers and on competitors was explained. The latter could go into a price war with the business which could have further negative impacts. Consequences on employees and the government were also explained, but these focused more on Aroha’s ability to expand rather than being focused on the lower price of $9.