Mark Scheme

November 2017
Results

Pearson LCCI
Certificate in Advanced
Business Calculations
(ASE3003)
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Publication code: 54352_MS
© Pearson Education Ltd 2017

2 ASE3003
November 2017
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.

3 ASE3003
November 2017
Question Answer Mark
Number
1 (a) Amount written off = RM875,000 - RM35,000 M1
= RM840,000

Percentage of cost = (RM840,000/RM875,000) x M1

100 = 96% A1 (3)

Question Answer Mark

Number
1 (b) Year Annual Cumulative Book Value at
depreciation depreciation end of Year
RM RM RM
Initial 875,000
cost
Year 1 168,000 168,000 707,000
Year 2 168,000 336,000 539,000
Year 3 168,000 504,000 371,000
Year 4 168,000 672,000 203,000
Year 5 168,000 840,000 35,000

M1 for inclusion of initial cost. M1

A1 for calculation of RM168,000 A1
(19.2% x RM875,000)
M1 for cumulative column M1
M1 for book value column M1
A1 for fully correct table A1 (5)

4 ASE3003
November 2017
Question Answer Mark
Number
1 (c) Book value after year 1 = RM707,000 A1ft
Scrap value = RM35,000, six years later
Amount written off annually:
(RM707,000 - RM35,000) / 6 = RM112,000 M1
Original cost = RM707,000 + RM112,000 M1
= RM819,000 A1

The first figure of RM707,000 comes from Q1(b).

If candidate has calculated this incorrectly, but
carried the figure through to Q1(c), then A1ft is
awarded. Also the two M marks here can also be
achieved for correct working with the transferred
figure.

Alternative method
Book value after year 1 = RM707,000 (A1ft)
Let X represent the original cost
X – 7(X – 707,000) = 35,000 (M1)
-6X + 4,949,000 = 35,000
X = (4,949,000 – 35,000)/6 (M1)
X = RM819,000 (A1) (4)

Total for Question 1 – 12 marks

5 ASE3003
November 2017
Question Answer Mark
Number
2 (a)(i) $4,450,000 + $355xW = $3,100,000 + $445xW M1

($445 - $355) x W = $4,450,000 - $3,100,000 M1

$90W = $1,350,000
W = 15,000 units A1 (3)

Question Answer Mark

Number
2 (a)(ii) Contribution for Q: $600 - $445 = $155 M1

Fixed cost / contribution: M1

$3,100,000 / $155
BEP = 20,000 units A1 (3)

Question Answer Mark

Number
2 (b) Income from sales: 35,000 x $600 = $21,000,000 M1

Method P: 4,450,000 + (35,000 x 355)

= $16,875,000
Profit is $21,000,000 - $16,875,000 = $4,125,000 M1

Method Q: 3,100,000 + (35,000 x 445)

= $18,675,000
Profit is $21,000,000 - $18,675,000 = $2,325,000 M1

Profit from P exceeds profit from Q by

£4,125,000 - $2,325,000 = $1,800,000 A1

It is also possible to derive $1,800,000 by simply

comparing the costs ($18,675,000 - $16,875,000)
without calculating the value of the profit. This
approach does each element rewarded above
apart from calculating the income from sales, but
since this impacts both methods equally, it is not
material to the final answer. (4)

Question Answer Mark

Number
2 (c) The contribution/profit per unit is greater for P. M1
OR
The variable costs for P are lower.
Therefore the difference in profit will be greater
than the value in (b). A1(2)

Total for Question 2 – 12 marks

6 ASE3003
November 2017
Question Answer Mark
Number
3 (a)(i) Stock change = 19,530 - 16,500 = ￥3,030 M1

COGS = 118,710 - 3,655 - 3,030 M1

= ￥112,025 A1 (3)

Question Answer Mark

Number
3 (a)(ii) Net sales = 262,500 - 5,625 = ￥256,875 M1

Gross Profit = 256,875 - 112,025 = ￥144,850 M1

GP as %-age of NS = (144,850 / 256,875) x 100

= 56.3892944% (accept 56.4% or more accurate) A1 (3)

Question Answer Mark

Number
3 (a)(iii) Overhead expenses
= 7,890 + 1,960 + 2,440 +12,585 +9,105 M1
= ￥33,980

As %-age of NS: (33,980 / 256,875) x 100

= 13.22822384% (accept 13.2% or more A1
accurate) (2)

Question Answer Mark

Number
3 (a)(iv) Average shelf-life = (Average stock / COGS ) x365
Average stock = 0.5 x (16,500 + 19,530) M1
= ￥18,015
Shelf life = (18,015 / 112,025 ) x 365 M1
= 58.696 days
Accept 59 days A1ft
(3)

Question Answer Mark

Number
3 (a)(v) Gross profit - overhead expenses:
￥144,850 - ￥33,980 = ￥110,870 A1ft (1)

Question Answer Mark

Number
3 (b) Gross profit less overhead expenses is net profit. A1 (1)

Total for Question 3 – 13 marks

7 ASE3003
November 2017
Question Answer Mark
Number
4 (a) Weight Index Weight x Index
137 141 19,317
M1
94 101.7 9,559.8
219 130.5 28,579.5
450 57456.3 M1M1

ΣWI / ΣW = 57,456.3 / 450 M1

= 127.6806r
= 127.68 A1r

First M1 is for multiplying weight by index on any

row. Second and third M1 marks are for summing
W and WI. Fourth M1 is for dividing one by the
other. Final A1 is for 127.68 only. (5)

Question Answer Mark

Number
4 (b) QR: 85,960 / 61,400 M1
= 1.4 A1 (2)

Question Answer Mark

Number
4 (c) PR: S$4.37 / S$3.80 M1
= 1.15 A1 (2)

8 ASE3003
November 2017
Question Answer Mark
Number
4 (d) XS Eggs:
Sales revenue 2016: S$7.45 x 85,960
= S$640,402 M1 (for
Sales revenue 2015: S$7.99 x 61,400 both)
= S$490,586
Index: (S$640,402 / S$490,586) x 100 = 130.538 A1
(accept 131)

Sugary Snowballs
Sales revenue 2016: S$4.37 x 69,000
= S$301,530 M1 (for
Sales revenue 2015: S$3.80 x 57,500 both)
= S$218,500
Index: (S$301,530 / S$218,500) x 100 = 138 A1

Alternatively:
XS Eggs
QR sales (from 4(b)(i)): 1.4
PR: 7.45 / 7.99 = 0.932
Thus Index: 1.4 x 0.932 x 100 = 130.538
Sugary Snowballs
QR sales: 69,000 / 57,500 = 1.2
PR (from 4(b)(ii): 1.15
Therefore Index: 1.2 x 1.15 x 100 = 138 (4)

Total for Question 4 – 13 marks

9 ASE3003
November 2017
Question Answer Mark
Number
5 (a) First two years inflow = (B$15,000) + B$120,000
= B$105,000

Investment still to be repaid

= B$195,000 - B$105,000 = B$90,000 M1

As a fraction of year 3: B$90,000 / B$120,000 M1

= 3/4

Payback period is 2 and 3/4 years A1

= 2 years 9 months (3)

Question Answer Mark

Number
5 (b) Project Two:
B$ Discount NPV (B$)
Factor
Cost 195,000 1.000 -195000 M1
Year 1 (15,000) 0.870 (13,050)
Year 2 120,000 0.756 90,720
Year 3 120,000 0.658 78,960
Year 4 40,000 0.572 22,880 A1
(15,490) M1A1

First M1 is for setting about the NPV calculation

correctly, including the investment cost at par and
shown as negative. The accuracy mark is for the
yearly contributions to NPV, all of which must be
correct. Second M1 is for adding the figures. Final
A1 is for achieving the correct answer. (4)

Question Answer Mark

Number
5 (c) Correct statements are C, D and F
One A1 mark per correct answer A3 (3)

Total for Question 5 – 10 marks

10 ASE3003
November 2017
Question Answer Mark
Number
6 (a) Total assets
= 445 + 9,500 + 7,614 + 3,500 + 3,750 + 3,800 M1
= AU$28,609 A1

Total liabilities = 40,025 + 11,000 M1

= AU$51,025 A1(4)

Question Answer Mark

Number
6 (b)(i) Secured debts: 11,000 + 5,000 = 16,000
Unsecured debts: 51,025 - 16,000 = 35,025 M1
Assets less payment to secured debts:
28,609 - 16,000 = 12,609 M1

Rate in the AU$: 12,609/35,025 = 0.36 M1

Expressed as 36cents in the AU$ A1
or as AU$0.36 in the AU$ (4)

Question Answer Mark

Number
6 (b)(ii) Amount owed = AU$3,456 / 0.36 M1ft
= AU$9,600 A1ft
Follow-through only rewarded where figure used in
place of 0.36 lies between 0 and 1. (2)

Question Answer Mark

Number
6 (b)(iii) Amount of unsecured debt = AU$6,200 / 2 M1
= AU$3,100
Amount paid on unsecured debt
= AU$3,100 x 0.36 = AU$1,116 M1ft

Total paid = AU$3,100 + AU$1,116 = AU$4,216 A1ft

Follow through only rewarded where figure used in
place of 0.36 lies between 0 and 1. A1 follow
through still requires correct treatment of
AU$3,100 secured debt. (3)

Question Answer Mark

Number
6 (b)(iv) Let S be the amount owed which is secured. M1
Then, S + 0.36 (4,340 - S) = 2,100 M1ft
0.64S = 2,100 - 1,562.40 = 537.60
Hence S = 537.60 / 0.64 = AU$840 A1ft
Follow through relates only to figure of 0.36 from
(b)(i) (3)

Total for Question 6 – 16 marks

11 ASE3003
November 2017
Question Answer Mark
Number
7
A B C D
Sum RM60,000 RM40,000 RM80,000 RM100,000
invested (C1) (D1)
Rate of 3.00% 4.50% 3.50% 4.00%
interest per
annum
Time 5 3 4 7
invested (C2)
(years)
Final RM69,556 RM45,647 RM91,802 RM131,593
amount (B1)
(Principal +
interest)
Interest RM9,556 RM5,647 RM11,802 RM31,593
earned (B2) (D2)

B1: 1.0453 = 1.141166125 x RM40,000 M1

= RM45,647 A1

B2: B1 - RM40,000 M1
= RM5,647 A1ft

C1: RM91,802 - RM11,802 M1

= RM80,000 A1

C2: RM91,802 / RM80,000 = 1.147525 M1

1.035X = 1.147525
X=4 A1

D1: 1.047 = 1.31593 M1

RM131,593 / 1.31593 M1
= RM100,000 A1

D2: RM131,593 - RM100,000 M1

= RM31,593 A1(13)

Total for Question 7 – 13 marks

12 ASE3003
November 2017
Question Answer Mark
Number
8 (a) Nominal value = K100 x K1,505,000 / K86 M1
= K1,750,000 A1 (2)

Question Answer Mark

Number
8 (b)(i) Interest = K1,750,000 x 4¼% x 3½years M1
= K260,312.50 A1ft (2)

Question Answer Mark

Number
8 (b)(ii) Interest only yield: K260,312.5 / K1,505,000 M1
= 0.1729651163 = 17.3% or more accurate. A1ft (2)

Question Answer Mark

Number
8 (c)(i) Units: K1,505,000 / K50 M1
= 30,100 units A1 (2)

Question Answer Mark

Number
8 (c)(ii) Percentage increase in value:
(K58.75 - K50) / K50 = 0.175 M1

Alternatively:
Percentage increase in value:
(K1,768,375 – K1,505,000) / K1,505,000
= 0.175

Annual increase: 0.175 / 3.5 = 0.05 M1

Average annual percentage increase is 5% A1 (3)

Total for Question 8 – 11 marks

Total for Paper – 100 marks

13 ASE3003
November 2017