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9706 ACCOUNTING
9706/22
This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of
the examination. It shows the basis on which Examiners were instructed to award marks. It does not
indicate the details of the discussions that took place at an Examiners meeting before marking began,
which would have considered the acceptability of alternative answers.
Mark schemes must be read in conjunction with the question papers and the report on the
examination.
CIE will not enter into discussions or correspondence in connection with these mark schemes.
CIE is publishing the mark schemes for the May/June 2010 question papers for most IGCSE, GCE
Advanced Level and Advanced Subsidiary Level syllabuses and some Ordinary Level syllabuses.
om
.c
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Page 2
1
(a)
(b)
Syllabus
9706
UCLES 2010
Paper
22
1
1
1
1
1
1
1
1
[8]
1
1
1
1
1
1
1
1
1
1
[11]
Page 3
(c)
Syllabus
9706
2800
952
3752
Current assets
Inventories (stocks)
Raw materials
Finished goods
Work in progress
Trade receivables
prov for d debts
Current Liabilities
Trade payables
Bank
1800
618
2418
$000
NBV
1000
334
1334
202
252
128
582
466
10
456
1038
426
290
716
Paper
22
2
2
1
1
1
322
1656
1338
318
1656
1
1
1
1
[11]
[Total: 30]
UCLES 2010
Page 4
2
Syllabus
9706
Data
Non-current (fixed) assets
Machinery
$000
4200
1200
-700
4700
Motor
Vehicles
$000
3200
800
-1000
3000
1560
470
-520
1510
840
750
-800
790
Percentage depreciation
470 100
Machinery
4700
750 100
Motor vehicles
3000
Paper
22
10%
25%
Depn 4 years
Cash
Loss
400
Vehicles (item 2)
Cost
1
400
Profit
1of
20
420
Vehicles (item 3)
Cost
1
360
$000
160
200
40
400
1
1
1of
Depn 3 years
Part exch
300
120
420
1
1
Depn 1 year
Bank
Loss
90
210
60
360
1
1
1of
360
[12]
1
1
1of
1of
$000
4700
900
-400
5200
1510
520
-160
1870
UCLES 2010
Motor
Vehicles
$000
3000
840 1
-760 1
3080
790
770
-390
1170
1of
1of
[8]
Page 5
Syllabus
9706
Paper
22
[3]
[3]
[4]
[Total: 30]
UCLES 2010
Page 6
3
Syllabus
9706
Paper
22
(a) (i) The break-even point is the level of activity at which the business makes neither a profit
nor a loss i.e. total contribution = total fixed costs. (accept a relevant formula)
[2]
(ii) The margin of safety is the distance between the break-even point and the expected
level of activity. It is the amount by which actual activity can fall short of expected
activity before a loss is incurred.
[2]
[4]
DATA
Sales
Variable costs
Fixed costs
Fixed costs
(c)
100
c/s ratio
460 000
299 000
90 000
1
1
460 - 299
100
460
1
1
90 000
100
35
1of
100
35
1of
100
(d) (Fixed costs + profit)
c/s ratio
1of
1
1
35
(375 000
) - 90 000
100
1of
UCLES 2010
35%
1of
[4]
$257 143
1of
[3]
$542 857
1of
[4]
$41 250
1of
[4]
$41 250
1of
Page 7
(f)
Syllabus
9706
Paper
22
$138 000
1of
revised contribution
100
new sales
1 of
$138 000 100
460 000 0.95
1
1
31.57895%
100
c/s ratio
1
1
= (90 000 + 80 000)
100
31.57895
1of
$538 333
1of
Accept answers between $531 250 and $548 387 answer depends on number of decimal
places revised c/s ratio is taken to.
[11]
ALTERNATIVE METHODS ACCEPTABLE THROUGHOUT
[Total: 30]
UCLES 2010