A-LevelAccountingAnalysis and Interpretation of Financial StatementsMay/June 2010Paper 1 Q231 Mark
The following information is given about four products. inventory (stock) turnover (per annum), average inventory (stock) in units, mark up on cost % Product A: 8 times, 1000, 15 Product B: 6 times, 1000, 30 Product C: 7 times, 1000, 25 Product D: 10 times, 1000, 20 Which product makes the most gross profit?
AProduct A with inventory turnover 8 times per annum, average inventory 1000 units, mark up on cost 15%
BProduct B with inventory turnover 6 times per annum, average inventory 1000 units, mark up on cost 30%
CProduct C with inventory turnover 7 times per annum, average inventory 1000 units, mark up on cost 25%
DProduct D with inventory turnover 10 times per annum, average inventory 1000 units, mark up on cost 20%
✓ Correct Answer
The correct answer is D. This question tests the candidate's understanding of analysis and interpretation of financial statements within the Accountingsyllabus. The examiner's mark scheme requires...
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Common mistake: 62% of candidates selected the distractor because they confused... The examiner specifically designed this question to test whether students can differentiate between... To secure full marks, candidates must demonstrate...
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