Explain one way PS could use cost information to improve business performance.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2023). The mark or mark type is shown in brackets.

1. A01 Knowledge and understanding: Knowledge of a use of cost information to improve business performance may include: Help make the investment decision / to obtain loans e.g from a bank.
2. Identify unnecessary expense.
3. To set prices.
4. Forecast profit.
5. To improve cash flow.
6. other factors involved e.g. cost of investment, future market conditions, whether the product will be successful
7. AO2 Application. Limited application: applies knowledge to PS once.
8. Developed application: applies knowledge to PS twice OR applies once to PS AND develops answer to explain how it can help improve business performance.
9. The profit has increased from $8m to $13m.
10. Environmentally friendly.
11. Added value.
12. Expenses do not increase very much so can spread over higher number of units.
13. Accept all valid responses.