Accounting

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  • Topic: General Certificate of Secondary Education, GCE Advanced Level
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UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS
GCE Advanced Level

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MARK SCHEME for the October/November 2011 question paper for the guidance of teachers

9707 BUSINESS STUDIES
9707/32 Paper 3 (Case Study), maximum raw mark 100

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.

• Cambridge will not enter into discussions or correspondence in connection with these mark schemes.

Cambridge is publishing the mark schemes for the October/November 2011 question papers for most IGCSE, GCE Advanced Level and Advanced Subsidiary Level syllabuses and some Ordinary Level syllabuses.

Page 2 1

Mark Scheme: Teachers’ version GCE A LEVEL – October/November 2011

Syllabus 9707

Paper 32 [10] Analysis 5 marks

Analyse the opportunities and threats of a global recession for ASC. Knowledge 3 marks Level 2 2–3 marks Two or more relevant points made or one point made plus good knowledge of recession shown. 1 mark One or two relevant points made or one point made plus some knowledge of recession shown. Application 2 marks 2 marks Points made are well applied to case.

3–5 marks Good use of theory to explain opportunities and threats.

Level 1

1 mark Some application to case.

1–2 marks Good use of theory to explain one side or limited use of theory to explain one or both sides.

Answers could include: Definition: world real GDP falling for at least 6 months. Threats: • Falling demand for steel-related products and therefore the demand for steel – data from case. • Cost of steel plant closures. • Increasing competitive threats. Opportunities: • Able to buy assets, e.g. competitors’ steel works, cheaply. • Reduced competition as rivals close. • Increased chance of government grants. • Good excuse to close worse-performing works. • May reduce unit wage costs due to excess supply of workers. • Interest rates may be low – opportunities to borrow to expand, e.g. automated machinery.

© University of Cambridge International Examinations 2011

Page 3 2

Mark Scheme: Teachers’ version GCE A LEVEL – October/November 2011

Syllabus 9707

Paper 32

(a) (i) Using data in Appendix A, calculate the variances for the Newtown steel works. [6] Budget and actual data for Newtown steel works, 2011 Budget for year ending 31/10/11 Revenue Material costs Labour costs Allocated overhead costs Profit $306m $125m $113m $40m $28m Actual data for year ending 31/10/11 $272m $118m $106m $41m $7m

Variance $34m adverse $7m favourable $7m favourable $1m adverse $21m adverse

Marks [1] [1] [1] [1] [2] [6]

(ii) Explain possible reasons for any two of these variances. Knowledge 2 marks Level 2 2 marks Two or more relevant reasons given. 1 mark One relevant reason. Application 2 marks 2 marks Both points made are well applied to case. 1 mark Some application to case. Analysis 2 marks

2 marks Good use of theory to explain reasons. 1 mark Good use of theory to explain one reason.

Level 1

Answers could include: • Adverse profit variance is caused by the adverse revenue variance being greater than the favourable direct cost variances. • Sales revenue variance is adverse because the demand for steel has fallen and the price per tonne may have fallen too. • Material variance is favourable as less steel is made and sold, so fewer materials will be needed. • Labour costs variance is favourable as flexible contracts may have allowed reduction in hours worked and/or wage costs may have fallen due to increased unemployment.

© University of Cambridge International...
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