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AQA A-LEVEL ACCOUNTING Paper 2 Accounting for analysis and decision-making JUNE 2024
Merged QP and MS
ACCOUNTING
Paper 2 Accounting for analysis and decision-making
Monday 3 June 2024 Morning Time allowed: 3 hours
Materials
For this paper you must have:
Instructions
- Use black ink or black ball-point pen.
- Fill in the boxes at the top of this page.
- Answer all questions.
- You must answer the questions in the spaces provided. Do not write outside the box around each page or on blank pages.
- If you need extra space for your answer(s), use the lined pages at the end of this book. Write the question number against your answer(s).
- Do all rough work in this answer book. Cross through any work you do not want to be marked.
Information
- The marks for each question are shown in brackets.
- The maximum mark for this paper is 120. For Examiner’s Use Section Mark A B C TOTAL
jun247127201 IB/M/Jun24/G4004/V5 7127/
Do not write outside the 03 Which of the following is an advantage of being a sole trader? [1 mark] box A They can sell shares to the general public. B They have full control over decision making. C They have limited liability. D They pay corporation tax. A business pays royalties on each unit it manufactures. Which of the following describes the cost of the royalties? [1 mark] A Direct and semi-variable B Direct and variable C Indirect and semi-variable D Indirect and variable Which of the following is (^) not a fundamental principle of ethical behaviour? [1 mark] A Confidentiality B Consistency C Integrity D Objectivity Turn over ►
Do not write outside the 04 Product Q has the following costs per unit: Materials 4 metres at £2 per metre Labour 1.5 hours at £12 per hour Overheads £4 per labour hour Product Q has a selling price of total cost plus a 10% mark up. What is the selling price of Product Q? [1 mark] box A £28. B £32. C £33. D £35. Which is the formula to calculate dividend cover? [1 mark] Dividend per share A (^) Market price per share Market price per share Dividend per share
× 100
× 100
Ordinary share dividends paid C (^) Profit after interest and tax Profit after interest and tax D (^) Ordinary share dividends paid
B
Do not write outside the 06 A manufacturer provides the following information: February March Budgeted sales (in units) 45 000 48 000 Closing inventory is to be maintained at 20% of the following month’s budgeted sales. The warehouse has a maximum capacity of 9 500 units. box What is the budgeted production in units for February? [1 mark] A 44 400 B 45 500 C 45 600 D 54 500
Do not write outside the Explain two benefits of using incremental budgeting. [6 marks] box Benefit 1 Benefit 2 Turn over for the next question Turn over ► 07
Do not write outside the 09 Zhou Budgeted trading section of the income statement for the year ended 30 April 2025 box Turn over ►
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- 10 * Naomi is preparing her labour budget for August. She has provided the following forecasted information: After allowing for holidays only 200 labour hours are available at the standard rate. Any additional hours used will have to be paid at a premium of 40% extra per hour. 30 box Production 500 units Labour hours per unit 45 minutes Standard labour rate £12 per hour Prepare the labour budget for August. Show clearly the number of hours required and the total labour cost. [4 marks]
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- 12 * Section B Answer all questions in this section. box Rixmead Ltd budgeted to produce 48 000 units in March. Budgeted information Direct labour cost £1 536 000 Direct material cost £672 000 Labour hours per unit 2.5 hours Material quantity per unit 4 kilograms Actual production in March was 51 000 units. Actual information Per unit £ Direct labour 3 hours 12.00 per hour Direct material 4.25 kilograms 2.90 per kilogram
. (^1) Calculate the following variances: [10 marks] Material price variance Material usage variance
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- 13 * Labour rate variance box Labour efficiency variance
. 2 Prepare a reconciliation of the budgeted cost to actual cost. [4 marks] Turn over ►
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- 15 * Turn over for the next question Turn over ►
Do not write outside the 16 Books Online is a digital business selling audiobooks. The directors are considering a technology upgrade to improve customer experience and have provided the following information in relation to the project: £ Cost of hardware 2 380 000 Delivery and installation of hardware 45 000 Software (annual cost) 120 000 Staff training (annual cost) 50 000 Fixed costs per year excluding depreciation 80 000 Purchase, delivery and installation of the hardware is expected at the end of 2024 and the technology will be implemented in 2025. The hardware will be depreciated over three years using the straight line method. The project will last three years, after which a further upgrade in technology will be needed. The hardware will then be sold for an estimated £400 000. The software will be used from 2025 and must be updated each year. The staff must be trained on each update. Forecast sales 2025 2026 2027 Units 500 000 12% increase 12% increase The percentage increase is based on the previous year’s sales in units. Throughout the 3 years the selling price per book is £6.50, and the variable cost per book is £2.80. Books Online uses a cost of capital of 14%. The discount factors are: Year Discount factor 0 1. 1 0. 2 0. 3 0. 1 5^ box
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. 2 Calculate the payback period for the project without and with this increase in cost. [4 marks] Without increase in cost With increase in cost *1 * (^1 5) Books Online has the option to buy different hardware for an additional cost of £500 000.
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. (^) Assess whether the decision to invest in the new technology should be based only on the payback and net present value calculations. box Use your answers from Questions 15.1 and 15.. [6 marks] Turn over ►
