Economics, Accounting & Business: Post your doubts here!

[aaakhtar19]

i hv also got a prob of Accounting A2 level 9706
9706_qp_43 year 2011 may june
q 1 Trade and other receivables??

expecting helpful replies!!!!!

 

[Esme]

as salam alikum
its simple, the difference between the profits based on marginal and absorption is the overheads, you must be knowing that marginal profits is calculated by valuing stocks on variable costs only, so the difference would give you the overheads
now, you have the overheads,, to get the OAR, you need the total output ofr the year, which is simply the stock at star of year minus stock at end of year.

W salam
Yes ur right !! its v simple. i got it now.
i was jus being dumb !

 

[Esme]

Please explain moral hazard and adverse selection with reference to market failure.

 

[Esme]

First u would have to find out the difference between opening stock and the closing stock, which is 3000 units. Then find the difference between the both the profit figures which is $19500. Divide this answer with 3000 units. U will get the fixed overhead rate!! And the mark scheme for accounting may/june 2002 paper is not on this website. I have checked it. So if u or any1 have it, pls post them here!!!!

Its weird. wen i open from my laptop i dont see these there but wen i open the site from my tablet its there. anyways i downloaded on my tablet n attached them here.
There you go !!

 

[Esme]

also please explain distribution consequences as a drawback of CBA.

 

[Muhammad Bin Anis]

First understand all the chapters fom the book. i mean your concepts should be clear , then practice as much as u can in the tme left now !

at times i mix up the accounting concepts

 

[student92]

also please explain distribution consequences as a drawback of CBA.

please post anything useful you find about these topics here, i also have problems in understanding them

 

[Iqra Ali]

Its weird. wen i open from my laptop i dont see these there but wen i open the site from my tablet its there. anyways i downloaded on my tablet n attached them here.
There you go !!

Thanx!!!

 

[student92]

http://www.xtremepapers.com/CIE/International A And AS Level/9706 - Accounts/9706_s10_qp_23.pdf
please help me in q3

 

[Paradoxical]

Hey guys, could someone please critique my answer for the following question? I'd really appreciate it!


Q 2. (a) Explain the functions of price in a market economy. [10 marks]

A market economy is one which involves minimal government intervention. In a market economy resources are allocated through the price mechanism. Price is central to the allocation of resources when demand and supply operates.

In a market, thousands of consumers express their demand, which is the desire and ability to pay. Producers express their supply, which is the wish and ability to sell their goods. These two forces interact to give price. Price measures opportunity cost, that is, what is given up due to a choice of buying or selling.

For each good, there is a supply schedule and a demand schedule. If the two are brought together, we find that the quantity demanded and the quantity supplied will be equal at one and only one market price. This is the equilibrium price, which is P, and the quantity demanded will be at equilibrium level Q. Refer to Figure 1.

Therefore, the price tells us what goods and services to produce (using the supply curve) and consume (using the demand curve), that is, the level Q.

Price also acts as a signalling function. Market prices will adjust to demonstrate where resources are required, and where they are not. Prices rise and fall to reflect scarcities and surpluses. So, for example, if market prices are rising because of high and rising demand from consumers, this is a signal to suppliers to expand their production to meet the higher demand. Conversely, a rise in the costs of production will induce suppliers to decrease supply, while consumers will react to the resulting higher price by reducing demand for the good or services.

Prices serve to ration scarce resources when demand in a market outstrips supply. When there is a shortage of a product, the price is bid up – leaving only those with sufficient willingness and ability to pay with the effective demand necessary to purchase the product.

I don't know what to write for my conclusion. Any ideas? And please let me know if you think I've missed anything out or not wrote something correctly. Thanks!

 

[Esme]

http://www.xtremepapers.com/CIE/International A And AS Level/9706 - Accounts/9706_s10_qp_23.pdf
please help me in q3

For a) bit we have to use the formula of cost break-even point which is diffrence in fixed costs divided by diffrence in unit contribution. For the b) part i wasnt sure so i did it mathematically taking the number of units to be x. The i found the profit for both the cabinets in terms of x and then equated them. You can then find the value of x. This is basic o levels math even if math isnt ur subject in a levels. The c) part is pretty staight forward i guess. find the total contribution and then deduct the fixed costs. Im also conffused about the d) bit though.

 

[student92]

For a) bit we have to use the formula of cost break-even point which is diffrence in fixed costs divided by diffrence in unit contribution. For the b) part i wasnt sure so i did it mathematically taking the number of units to be x. The i found the profit for both the cabinets in terms of x and then equated them. You can then find the value of x. This is basic o levels math even if math isnt ur subject in a levels. The c) part is pretty staight forward i guess. find the total contribution and then deduct the fixed costs. Im also conffused about the d) bit though.

cost break-even point?
what is this, and waht is the reasoning behind this formula?

 

[student92]

Hey guys, could someone please critique my answer for the following question? I'd really appreciate it!


Q 2. (a) Explain the functions of price in a market economy. [10 marks]

A market economy is one which involves minimal government intervention. In a market economy resources are allocated through the price mechanism. Price is central to the allocation of resources when demand and supply operates.

In a market, thousands of consumers express their demand, which is the desire and ability to pay. Producers express their supply, which is the wish and ability to sell their goods. These two forces interact to give price. Price measures opportunity cost, that is, what is given up due to a choice of buying or selling.

For each good, there is a supply schedule and a demand schedule. If the two are brought together, we find that the quantity demanded and the quantity supplied will be equal at one and only one market price. This is the equilibrium price, which is P, and the quantity demanded will be at equilibrium level Q. Refer to Figure 1.

Therefore, the price tells us what goods and services to produce (using the supply curve) and consume (using the demand curve), that is, the level Q.

Price also acts as a signalling function. Market prices will adjust to demonstrate where resources are required, and where they are not. Prices rise and fall to reflect scarcities and surpluses. So, for example, if market prices are rising because of high and rising demand from consumers, this is a signal to suppliers to expand their production to meet the higher demand. Conversely, a rise in the costs of production will induce suppliers to decrease supply, while consumers will react to the resulting higher price by reducing demand for the good or services.

Prices serve to ration scarce resources when demand in a market outstrips supply. When there is a shortage of a product, the price is bid up – leaving only those with sufficient willingness and ability to pay with the effective demand necessary to purchase the product.

I don't know what to write for my conclusion. Any ideas? And please let me know if you think I've missed anything out or not wrote something correctly. Thanks!

firsty, why did you type this, i suggest writing it would be better for you, you know time management practice.......
second, your answer is good, masha allah
but you could have referd to adam smith s invisible hand, when explaining the allocative mechanism in the third para, as adman smith suggested, the invisible hand is responsible for allocating resources to such a level at which both parties are willing and able to produce and buy respectively. i e an equilibrium price and quantity.
as for conclusion
lastly, price is essential for the functioning of a market sysetem, as there is no central authority or government to answer the basic economic questions of what , how and for whom to produce, when deciding how to allocate resorces. price, in a market economy, acts as the allocative mechanisim, signialling produces what to produce as conumer demand shifts,, or rationting when demand outstrips suppy.

 

[student92]

why does the bop always balance?
for instance, i buy a car from germany, it is recorded as a debit item in my countries bop, as a visible item is imported in the current account section,
now, where is the other entery, where is the money outflowing from my country being recorded, as i pay for my purchase?
thankyou

 

[milesph]

From ECO11ON32. The correct answer is C.
I understand that allocative efficiency is achieved when P(AR) = MC, but why is productive efficiency also achieved at point C?

 

[Zephyro]

From ECO11ON32. The correct answer is C.
I understand that allocative efficiency is achieved when P(AR) = MC, but why is productive efficiency also achieved at point C?

Alloc acheived when P = MC or in this case when AR = MC. Productive efficiency refers to the cost of production. Ideally to be completely productively efficient it would be mid way between point B and C. But as the question is asking for both alloc and product efficiency in the most suitable point, C is the only option.

 

[Gordious]

Can anybody please tell me what is the correct format to be used in appropriation account of a pvt ltd company in AS accounting? Please specifically tell about the proposed dividend, I am too confused.. :'(

 

[milesph]

Thanks a lot. Here's another question from the same paper:

Who is most likely to practice price discrimination?
A. a baker
B. a cinema
C. a hairdressing salon
D. a restaurant

The answer is A. Could anyone explain it? Thank you very much.

 

[smartguy]

Accounts P2. 2009. V1.
http://www.xtremepapers.com/CIE/International A And AS Level/9706 - Accounts/9706_s09_qp_2.pdf
In question 1 a. How do we find the Sales and Purchases?

 

[Esme]

One of the consequences of disequilibrium in th balance of payments is : dependence on the primary sector for developing countries. Please explain why ?