Mark Scheme

Series 4 2015
Results

Pearson LCCI Level 3 Advanced

Business Calculations (ASE3003)
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ASE3003
4_15
General Marking Guidance

 All candidates must receive the same treatment. Examiners must mark the
first candidate in exactly the same way as they mark the last.

 Mark schemes should be applied positively. Candidates must be rewarded

for what they have shown they can do rather than penalised for omissions.

 Examiners should mark according to the mark scheme not according to

their perception of where the grade boundaries may lie.

 There is no ceiling on achievement. All marks on the mark scheme should

be used appropriately.

 All the marks on the mark scheme are designed to be awarded. Examiners
should always award full marks if deserved, i.e. if the answer matches the
mark scheme. Examiners should also be prepared to award zero marks if
the candidate’s response is not worthy of credit according to the mark
scheme.

 Where some judgement is required, mark schemes will provide the

principles by which marks will be awarded and exemplification may be
limited.

 When examiners are in doubt regarding the application of the mark scheme
to a candidate’s response, the team leader must be consulted.

 Crossed out work should be marked UNLESS the candidate has replaced it
with an alternative response.

ASE3003
4_15
Question Answer Mark
Number
Number of time periods = 2 x 4 = 8 (M1)

1 (a)(i) Amount after 4 years = £170,000 x (1 + 3%)8 (M1)

= £215,350.91 (A1)

Question Answer Mark

Number
Interest = £215,350.91 - £170,000 =
(M1)
£45,350.91
1 (a)(ii) (M1)
Interest per cent = £45,350.91 / £170,000
(A1)
= 26.677% = 26.7%

Question Answer Mark

Number
Equivalent simple interest
= 26.677% / 4 per annum (M1)
1 (a)(iii)
= 6.7% (A1)

Question Answer Mark

Number
Principal = $484,000 (M1)

Interest = $500,000 - $484,000 = $16,000 (M1)

1 (b)
Time = 0.5 years (M1)

Interest per cent = $16,000 / ($484,000 x 0.5)

= 6.6% per annum (A1)

Total for Question 1 – 12 marks

ASE3003
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Question Answer Mark
Number
Percentage increase per annum
= (£205 - £160) / (£160 x 4.5) (M1)
2 (a)
= 6.25% (A1)

Question Answer Mark

Number
Increase per unit = £23,100 / 11,000 = £2.10 (M1)

2 (b) Original amount paid per unit = £15.12 - £2.10 (M1)

= £13.02 (A1)

Question Answer Mark

Number
Cost of £100 of debenture stock
= £100 x £53,700 / £60,000 (M1)
2 (c)(i)
= £89.50 (A1)

Question Answer Mark

Number
Interest received per annum = 3.75% x £60,000 (M1)
2 (c)(ii)
= £2,250 (A1)

Question Answer Mark

Number
12½% of her investment = 0.125 x £53,700 (M1)
2 (c)(iii)
= £6,712.50 (A1)

Question Answer Mark

Number
Approximate number of years
 £6,712.50 / £2,250 = 2.983 years (M1)
2 (c)(iv)
Number of years = 3 (A1)

Total for Question 2 – 13 marks

ASE3003
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Question Answer Mark
Number
Total distribution expenses per unit = £12 + £36
3 (a)(i)
= £48 (A1)

Question Answer Mark

Number
Fixed distribution expenses as a fraction
= £12 / £48 (M1)
3 (a)(ii)
=¼ (A1)

Question Answer Mark

Number
3 (b)(i) Fixed cost of labour per unit = £85 - £68 = £17 (A1)

Question Answer Mark

Number
Production overheads
= £230 - £36 - £68 - £62 - £12 - £17 (M1)
3 (b)(ii)
= £35 (A1)

Question Answer Mark

Number
Total variable costs per unit = £36 + £68 + £62 (M1)
= £166
3 (b)(iii)
Total variable costs per cent = £166 / £230 (M1)

= 72.2% (A1)

Question Answer Mark

Number
Total cost of labour per unit = £78 / 65% (M1)
3 (c)
= £120 (A1)

Total for Question 3 – 11 marks

ASE3003
4_15
Question Answer Mark
Number
Current assets = 2.3 x £19,200,000 (M1)
4 (a) (i)
= £44,160,000 (A1)

Question Answer Mark

Number
Stock held = (2.3 – 1.1) x £19,200,000 (M1)
4 (a)(ii)
= £23,040,000 (A1)

Question Answer Mark

Number
Current ratio is higher than the guideline figure
4 (b) (A1)
of 2 : 1

Question Answer Mark

Number
An acid test ratio of 1 : 1 or better indicates that
4 (c) the company can pay its current liabilities (A1)
without selling stock.

Question Answer Mark

Number
Gross profit = Net sales – cost of goods sold
= £1,540,000 - £1,095,000 = £445,000 (M1)

4 (d)(i) Net profit = Gross profit – overheads

= £445,000 - £204,000 (M1)

= £241,000 (A1)

Question Answer Mark

Number
Net purchases
= Cost of goods sold – opening stock + closing
stock
4 (d)(ii)
=£1,095,000 - £65,000 + £61,000 (M1)

= £1,091,000 (A1)

ASE3003
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Question Answer Mark
Number
Average stock = (£65,000 + £61,000) / 2 (M1)
= £63,000

4 (d)(iii) Average number of days

= 365 x £63,000 / £1,095,000 (M1)

= 21 days (A1)

Total for Question 4 – 14 marks

ASE3003
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Question Answer Mark
Number
Year 1 net estimated revenue return
5 (a)(i)
= £1,300,000 - £250,000 = £1,050,000 (A1)

Question Answer Mark

Number
Total net estimated revenue returns =
£1,300,000 + (6 x £2,000,000) – (7 x £250,000) (M1)
5 (a)(ii)
= £11,550,000 (A1)

Question Answer Mark

Number
Average net revenue returns = £11,550,000 / 7 (M1)
5 (a)(iii)
= £1,650,000 (A1)

Question Answer Mark

Number
Initial cost
= Average net revenue returns / average rate of
return
5 (b)
= £1,650,000 / 22% (M1)

= £7,500,000 (A1)

Question Answer Mark

Number
Internal rate of return
= 10% + (12% - 10%) x £280,000 (M1)
5 (c) £280,000 - £80,000

= 12.8% (A1)

Question Answer Mark

Number
Internal rate of return
= 12% + 1% x £80,000 / (£80,000 – (£30,000)) (M1)
5 (d)
= 12.73% = 12.7% (A1)

ASE3003
4_15
Question Answer Mark
Number
Net cash inflow still required in year 7
= £2,500,000 – (6 x £400,000) = £100,000 (M1)

5 (e) Expected net cash inflow in year 7

= £100,000 x 12 / 8 (M1)

= £150,000 (A1)

Total for Question 5 – 14 marks

ASE3003
4_15
Question Answer Mark
Number
Liabilities = £15,200 + £279,800 = £295,000 (M1)

Business assets as a percentage of the liabilities

6 (a)
= £94,400 / £295,000 = 0.32 (M1)

= 32% (A1)

Question Answer Mark

Number
Total owed to secured creditors
6 (b)(i) = £15,200 + £9,250
= £24,450 (A1)

Question Answer Mark

Number
6 (b)(ii) Total paid to secured creditors = £24,450 (A1)

Question Answer Mark

Number
Total paid to unsecured creditors
= £94,400 - £24,450 (M1)
6 (b)(iii)
= £69,950 (A1)

Question Answer Mark

Number
Dividend paid to unsecured creditors, per pound
= £69,950 / £279,800 = 0.25 (M1)
6 (b)(iv)
= £0.25 (A1)

Question Answer Mark

Number
Paid to an unsecured creditor who is owed
£17,820
6 (b)(v) = 0.25 x £17,820 (M1)

= £4,455 (A1)

Total for Question 6 – 11 marks

ASE3003
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Question Answer Mark
Number
Annual depreciation = (£580,000 - £160,000) / 3 (M1)
7 (a)(i)
= £140,000 (A1)

Question Answer Mark

Number
Initial cost = £580,000 + £140,000 (M1)
7 (a)(ii)
= £720,000 (A1)

Question Answer Mark

Number
Estimated scrap value after 5 years
= £160,000 - £140,000 (M1)
7 (a)(iii)
= £20,000 (A1)

Question Answer Mark

Number
Annual rate of depreciation
= 1 - 3(£160,000 / £580,000) (M3)
7 (b)(i)
= 34.9% (A1)

Question Answer Mark

Number
Book value after 2 years
= £580,000 x (1 – 0.349) (M1)
7 (b)(ii)
= £377,580 (A1)

Question Answer Mark

Number
Estimated scrap value after 9 years
= £160,000 x (1 – 0.349)5 (M1)
7 (b)(iii) (or) £580,000 x (1 – 0.349)8

 £18,700 (A1)

Total for Question 7 – 14 marks

ASE3003
4_15
Question Answer Mark
Number
Quantity relative = 36,000 / 30,000 (M1)
8 (a)(i)
= 1.2 (A1)

Question Answer Mark

Number
Price relative = £6.00 / £4.80 (M1)
8 (a)(ii)
= 1.25 (A1)

Question Answer Mark

Number
Index of total sales value
= 100 x (36,000 x £6.00) / (30,000 x £4.80) (M1)
8 (a)(iii)
= 150 (A1)

Question Answer Mark

Number
Unit sales in 2014 = 36,000 x 115 / 100 (M1)
8 (b)(i)
= 41,400 (A1)

Question Answer Mark

Number
Chain base index: 2013 2014
8 (b)(ii) (A1)
120 115

Question Answer Mark

Number
Unit price in 2000 = £4.80 / 1.6 (M1)
8 (c)
= £3.00 (A1)

Total for Question 8 – 11 marks

Total for Paper – 100 marks

ASE3009
13 4_15