Mark Scheme

April 2019

Pearson LCCI Certificate in Advanced Business

Calculations Level 3
(ASE3003)
LCCI Qualifications

LCCI qualifications come from Pearson, the world’s leading learning

company. We provide a wide range of qualifications including academic,
vocational, occupational and specific programmes for employers. For further
information, please visit our website at www.lcci.org.uk.

Pearson: helping people progress, everywhere

Our aim is to help everyone progress in their lives through education. We

believe in every kind of learning, for all kinds of people, wherever they are
in the world. We’ve been involved in education for over 150 years, and by
working across 70 countries, in 100 languages, we have built an
international reputation for our commitment to high standards and raising
achievement through innovation in education. Find out more about how we
can help you and your students at: www.pearson.com/uk

April 2019
Publication Code: 45981_MS
All the material in this publication is copyright
© Pearson Education Ltd 2019

ASE3003
2 April 2019
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
3 April 2019
Question Answer Mark
Number

1 (a) Nominal value: RM100 x 468,140 / RM89 M1

= RM526,000 A1 (2)

Question Answer Mark

Number

1 (b) Interest = RM526,000 x 3½ years x 2½% M1

= RM46,025 A1 (2)

Question Answer Mark

Number

1 (c) Cost of shares = 180,000 x RM7.85 M1

= RM1,413,000 A1 (2)

Question Answer Mark

Number

1 (d) Dividend per annum = 180,000 x RM9 x 5¼% M1

= RM85,050 A1 (2)

Question Answer Mark

Number

1 (e) Increase in price: RM81 – RM67 = RM14 A1 (1)

Question Answer Mark

Number

1 (f) Percentage increase per annum:

RM14 / (RM67 x 2½) = 0.08358208955 M1M1
= 8.4% or more accurate A1 (3)

Total for Question 1 = 12 marks

ASE3003
4 April 2019
Question Answer Mark
Number

2 (a) Preliminary calculations before graph:

Lines are: y = 700x (Sales revenue)
y = 1,000,000 (Fixed costs) M1
y = 1,000,000 + 300x (Total costs)
M1

M1 for each of the sales revenue and total costs equa-

tions, or correct placement within the chart.
A1 for X-scale in [0, 5,000)
A1 for Y scale in [0, 4,000,000) or less, but sufficient to
answer subsequent questions
A1 for intersection of lines with x in the range
(2,400 to 2,600)
A1 for correct intercept of total cost line
A4 (6)

ASE3003
5 April 2019
Question Answer Mark
Number

2 (b)(i) From the graph ONLY:

BEP estimated at 2,500 units A1
Condone answers in (2,400 to 2,600)
Sales revenue estimated at RM1,750,000 A1 (2)
Condone answers in (RM1,600,000, RM1,900,000)

Question Answer Mark

Number

2 (b)(ii) Profit on sales of 2,000 units is -RM200,000 (i.e. a M1

loss of RM200,000) A1
Condone answers in (-RM225,000, -RM175,000)
Candidates should have read this from their graph,
showing suitable lines. No method marks for
calculations of cost, revenue, etc. Answer must be
expressed as a loss or negative figure. (2)

Question Answer Mark

Number

2 (c) Labour cost: 29% of RM300 = RM87 M1

Materials cost: 2/5 of RM300 = RM120 M1
Overhead expenses = RM300 – RM87 – RM120
= RM93 A1(3)

Alternatively,
100% - 40% - 29% = 31% (M1)
31% x RM300 = RM93 (M1A1)

Total for Question 2 = 13 marks

ASE3003
6 April 2019
Question Answer Mark
Number

3 (a) Annual cash saving: 6,000 x RM50 = RM300,000 M1

Quality Windows Ltd investment:

RM Discount NPV (RM)
Factor
Cost 1,250,000 1.000 (1,250,000) M1
Year 1 300,000 0.926 277,800
Year 2 300,000 0.857 257,100 A1
Year 3 300,000 0.794 238,200
Year 4 300,000 0.735 220,500
Year 5 300,000 0.681 204,300
_________
-52,100 M1A1

First M1 is for calculating the cash saving in each year.

Second M1 is for setting about the NPV calculation cor- (5)
rectly, including the investment cost at par and shown
as negative. A1 for any one of the yearly contributions
to NPV. Third M1 is for adding the figures. Final A1 is
for achieving the correct answer.

Question Answer Mark

Number

3 (b) IRR =
((13600  8) − (−52100  6))
13600 + 52100 M1
= 6.414003… % = 6.4% or more accurate
A1
Alternatively, (2)
13, 600
6% + (8% − 6%)
13, 600 + 52,100 (M1)
= 6.414003… % = 6.4% or more accurate (A1)

ASE3003
7 April 2019
Question Answer Mark
Number

3 (c) The NPV of the investment is negative at 8% (A1).

Therefore, the director should not proceed with the in-
vestment (A1).
A1ft
Also accept explanations that with small changes to
output or time value of money (A1), the NPV might be A1ft
positive, thus making the investment worthwhile (A1). (2)

Also accept explanations that with such comparatively

small NPV values (A1), there is no compelling argu-
ment in favour of the investment, even if the NPV were
positive (A1).

Also accept explanations that an IRR of 6.41% means

that borrowing money at 8% (A1) for investment is
likely to lead to a loss (A1).

Question Answer
Number
Mark

3 (d) Return per annum net of repairs and maintenance:

RM 2, 050, 000
− 25, 000
5 M1 (num)
= RM 1, 750, 000 M1 (den)
= 0.22
Return is 22%.
A1
Alternatively, (3)
2, 050, 000 − (5  25, 000)
(1, 750, 000  5) (M1 num)(M1 den)
= 0.22
Return is 22% (A1)

Total for Question 3 = 12 marks

ASE3003
8 April 2019
Question Answer Mark
Number

4 (a) Express scrap value as a fraction of initial cost:

£85,000 / £750,000 = 0.11333333 M1

Per annum: 5√0.11333333 = 0.6469512145 M1

Rate of depreciation: 1 - 0.6469512145 M1

= 0.3530487855 = 35.30487855%

Accurate to two decimal places: 35.30% A1

(4)

Question Answer Mark

Number

4 (b) Year Annual Cumulative Book value at

Depreciation (£) Depreciation year end (£)
(£)
0 - - 750000
1 262500 262500 487500
2 170625 433125 316875
3 110906.25 544031.25 205968.75
4 72089.06 616120.31 133879.69

M1 for 750,000 x 35% = 262,500.

M1 for correctly calculating cumulative depreciation by
adding each annual figure to the previous cumulative
figure
M1 for correctly calculating each book value figure by
subtracting cumulative depreciation from initial cost.
A1 for a fully correct answer.

Allow all figures rounded to the nearest pound here,

and subsequently in (c)(i) and (c)(ii). (4)

ASE3003
9 April 2019
Question Answer Mark
Number

4 (c)(i) Book value at end of Year 4 using 35.30%

depreciation:
= £750,000 x (1 - 0.3530)4 = £131,425.12 M1A1
Difference is £131,425.12 - £133,879.69 M1
= -£2,454.57 (condone £2,454.57) A1

Alternatively,
£85,000 (Scrap value)
= Year 4 Book Value / (1 - 0.3530) M1
which gives: Year 4 BV = £131,375.58 A1
so difference = £131,375.58 - £133,879.69 M1
= -£2,504.11 (condone £2,504.11) A1
(4)

Question Answer Mark

Number

4 (c)(ii) Difference is -£2,454.57

Correct figure is £131,425.12

Percentage error is -£2,454.57 / £131,425.12 M1

= 0.01867656655 = 1.867656655% A1
Allow 1.9%

Alternatively,
Difference is -£2,504.11
Correct figure is £131,425.12

Percentage error is £2,504.11 / £131,425.12 M1

= 0.01905351123 = 1.905351123% A1
Allow 1.9% (2)

Total for Question 4 = 14 marks

ASE3003
10 April 2019
Question Answer Mark
Number

5 (a)
Industry Weight Index WI M1 for any
Energy and 350 106 37,100 correct WI
water figure
Manufacturing
Industries:
Chemicals 70 81 5,670
Engineering 90 110 9,900
Food and Drink 210 130 27,300 A1 for all
correct WI
Textiles and 80 119 9,520
Clothing

∑WI = 89,490 M1

∑W = 800 M1

Hence index for 2019 is ∑ / ∑

WI W
= 89490/800 = 111.8625 M1
Accept 111.9 or 112 only for accuracy mark A1r
(6)

Question Answer Mark

Number

5 (b) New index for 2019 = (111.9 x 130) / 100 M1

= 145.47
Accept 145.5 or 145 only for this calculation. A1r

If candidate uses 112:

New index for 2019 = (112 x 130) / 100
= 145.60
Accept 145.6 or 146 only in this case. (2)

ASE3003
11 April 2019
Question Answer Mark
Number

5 (c)
For manufacturing, ∑ WI = 89,490 – 37,100 =
52,390
Alternatively, candidate may use 5,670 + 9,900 +
27,300 + 9,520 = 52,390

For manufacturing ∑W = 450 M1 (both)

Hence manufacturing index for 2019 = 52,390 / 450 M1

= 116.4222222…....
Accept ONLY 116.4 or 116 for accuracy mark A1r (3)

Question Answer Mark

Number

5 (d) The computer manufacturing company’s index is 134,

while the overall index is 116 or 116.4. A1ft
Therefore the increase in production has been much
higher than the average, and the company is
performing well. A1ft (2)

Total for Question 5 = 13 marks

ASE3003
12 April 2019
Question Answer Mark
Number

6 (a) (i) Liabilities = £64,750 + £153,250 M1

= £218,000
Assets as a percentage = £95,400 / £218,000 M1
= 0.4376146789 = 43.76146789%
Accept answers rounding to 43.8% or better. A1 (3)

Question Answer Mark

Number

6 (a) (ii) Paid to unsecured creditors = £95,400 - £64,750 M1

= £30,650 A1 (2)

Question Answer Mark

Number

6 (b) Oguri is the secured creditor. A1

He received proportionately more than Yamada. A1 (2)

Question Answer Mark

Number

6 (c)(i) Yamada is the unsecured creditor. M1

Her rate is £7,260 / £22,000 = 0.33 M1
= £0.33 in the £ A1 (3)

Question Answer Mark

Number

6 (c)(ii) Oguri is both a secured creditor and an unsecured

creditor.
Let the amount owed to Oguri as a secured creditor
be S.
Then, S + 0.33 (18,000 - S) = 7,200 M1
Thus 0.67S = 7,200 – 5,940 = 1,260 M1
Amount of secured debt = £1,260 / 0.67
=£1880.5970149 = £1,880.60 only A1(3)
(This is actually a recurring decimal with 33 digits in
each recurrence, but we will settle for pounds and
pence!)

Total for Question 6 = 13 marks

ASE3003
13 April 2019
Question Answer Mark
Number
7 (a)(i) Interest earned
= RM28,000 x 0.0375 x 3 M1
= RM3,150 A1 (2)

Question Answer Mark

Number
7(a)(ii) Interest rate over three years:
1.03753 - 1 = 0.1167714844 M1

Interest earned: RM28,000 x 0.1167714844 M1

= RM3,269.601563 rounds to RM3,269.60 A1

Also accept answers, correctly calculated, using a value

rounded to 0.117 or better in the calculation.

Also, where candidates calculate year to year:

Year 1: RM28,000 x 1.0375 = RM29,050
Year 2: RM29,050 x 1.0375 = RM30,139.37
Year 3: RM30,139.37 x 1.0375 = RM31,269.60
Interest: RM31,269.60 - RM28,000 = RM3,269.60
In this case, M1 for all yearly balance calculations, M1
for calculation of interest by subtracting principal, and
A1 for final value.
(3)

ASE3003
14 April 2019
Question Answer Mark
Number
7 (b) Interest earned:
Balance Days Product Cr/Dr
1,500 4 6,000 Cr
1,350 3 4,050 Cr M1 (any)
1,196 8 9,568 Cr
446 7 3,122 Cr
1,596 2 3,192 Cr
Totals 25,932
Interest earned is
25,932 2.25

365 100 = RM1.5985 = RM1.60
M1
Interest payable:
Balance Days Product Cr/Dr
504 6 3,024 Dr
Interest payable is
3, 024 13.5

365 100 = RM1.1185 = RM1.12 M1
Total interest payable to Kuroki RM1.60 – RM1.12 =
RM0.48
A1 (4)
M1 mark for calculation of RM1.12 to include
indication that this is to be deducted from the interest
earned on other days of the month.

Question Answer Mark

Number
7 (c) Figure brought forward is

RM1,596.00 + RM0.48 – RM150.00 = RM1,446.48

M1A1 (2)

Total for Question 7 = 11 marks

ASE3003
15 April 2019
Question Answer Mark
Number

8 (a)(i) 3x + 2y = 6.9 (Eq 1)

x + 4y = 7.2 (Eq 2)

M1
Multiply Eq 1 by 2: 6x + 4y = 13.8
M1
Subtract Eq 2 x + 4y = 7.2 M1
Gives 5x = 6.6
Thus, x = 1.32, so weight of one GTX card is 1.32kg. A1 (4)

Alternatively,
y = (6.9 -3x)/4 = (7.2 - x)/ 2 (M1)
27.6 - 12x = 14.4 - 2x (M1)
gives 10x = 13.2 (M1)
x = 1.32kg (A1)

Alternatively, the equations can be used to solve first

for y, by multiplication of Eq. 2 by 3, for example.

Question Answer Mark

Number

8 (a) (ii) Substitute in Eq 2: 1.32 + 4y = 7.2 M1

Thus, 4y = 5.88 M1
y = 1.47
A1 (3)
Weight of a Mega-pixel card is 1.47kg

Alternatively, if y was found in (i), then substitution

into Eq 1 will derive a value for x in this part.

Where candidates have not manipulated the equations

correctly in (a)(i), but carry out correct manipulation in
this part in order to solve one of the unknown
variables, method marks normally attributable to (a)(i)
may be awarded in this part.

ASE3003
16 April 2019
Question Answer Mark
Number

8 (b) If Qdemand = Qsupply, then

750 - 5P = -240 + 6P M1
Hence 11P = 750 + 240 = 990 M1
Thus Price = RM90 A1 (3)

Question Answer Mark

Number

8 (c) Substituting back in the supply equation.

Qsupply = -240 + (6 x 90) M1
= 300 video cards A1 (2)

Alternatively, substituting in the demand equation.

Qdemand = 750 – (5 x 90) = 300
= 300 video cards

Total for Question 8 = 12 marks

ASE3003
17 April 2019