STRICTLY CONFIDENTIAL

THE PUBLIC ACCOUNTANTS EXAMINATION

COUNCIL OF MALAWI

2013 EXAMINATIONS
ACCOUNTING TECHNICIAN PROGRAMME

PAPER TC 3: BUSINESS MATHEMATICS & STATISTICS

WEDNESDAY 27 NOVEMBER 2013 TIME ALLOWED : 3 HOURS

9.00 AM - 12.00 NOON

SUGGESTED SOLUTIONS
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SECTION A

1. (a)
 2 3  4  9
3
=
 1 2 3   53 =  1 8   5  5  5 = -10,
3  82  4  52  4  5  5 4
3  2  13  (1)  3   13  1  12
(b) u =   1 ,
2  3  3  (2) 66 12

2. (a) 3x 2  2 x  1  0

Using the quadratic formula, a  3 , b  2 and c  1 :

 b  b 2  4ac  (2)  (2) 2  4  2  (1)
Then x  = ,
2a 23
2  (4  12
= ,
6
24 24
x or x  ,
6 6
1
i.e. x  1 or x   ,
3

(b) Area of lawn = l b  18 15  270 ,

Cost of turf = 270  K 420  K113,400
Labour cost = 2  K10000  K 20,000
Equipment hire = 2  K 6000  K12,000 ,
Total cost = K145,400,
Hence estimated cost with 15% markup,
= 1.15  K145,400  K167,210 ,

[OR 15% markup = 15% of K145,400 = K21,810,

Then estimated cost = K21,810 + K145,400 = K167,210

3. (a) (i) Qualitative data are data that consists of categories or types of a
characteristic or attribute while quantitative data are data that can
be expressed numerically.

(ii) Qualitative data: Type of car and fuel type,

Quantitative data – Number of doors and CO2 emission rate,
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(b) No. of msgs sent Tally marks Frequency

0 – 19 ||||| ||||| | 11
20 – 39 ||||| 5
40 – 59 |||| 4
60 – 79 ||| 3
80 – 99 | 1

4. (a) (i) Measures of location – These give some idea of the centre or middle of a
set of data. They suggest a ‘middle’ or ‘typical’ level.
(ii) Measures of spread – They tell us how broadly a set of observations is
scattered or spread out or dispersed.

(b) Ordering the data:

5 5 5 5 5 6 6 6 6 7
7 8 8 8 9 9 9 9 9,

(i) Median is 7,

 n  1   20 = 5th position from the bottom,

1 1
Lower quartile:
4 4
Hence the lower quartile is 5.

 n  1   20 = 15th position from the bottom,

3 3
Upper quartile:
4 4
Hence the upper quartile is 9.

(ii) Mean =
 x  5  5  5  ....  7  ...  9 =
132
 6.9 correct to 1D, ,
n 19 19
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5. (a) Let last year’s profit be x .

So 1.075x  6.2 ,
6.2
Then x  = K5.77 million to 3 s.f.,
1.075

(b) Let A be the event a customer orders chips-bonya and B be the event a customer
orders nsima- ngumbi.
Then
(i) P(the customer ordered chips-bonya only) = P(A) =
250  40 210
  0.525 ,
400 400
(ii) P(the customer ordered only one of the two menu items)
= P(A or B),
= P(A)+P(B) – P(A and B),
210 130
=   0,
400 400
340
=  0.85 ,
400

6. (a) The diagram shows when the investments and evaluation take place.

3000 1800 1800 1800 600 Value?

The K3,000 is invested for 5 years and grows to 3000 *1.07 5  K 4207.66

The three sums of £1,800 are invested for 4, 3 and 2 years, and grow in total to
1800 *1.07 4  1800 *1.07 3  1800 *1.07 2  K 6625.33 ,
Finally, the K600 is invested for just 1 year and grows to
600 *1.071  K 642 ,

Hence the total value at the end of 5 years is:

K4207.66 + K6625.33 + K642 = K11,474.99 .

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(b) Total amount received over the 10 month period, S 

n
 2a  n  1 d  :
2
Firm A: Sum S 
10
 2  24000  10  1 900  = K280,500,
2
Firm B: Sum S   2  22000  10  1 1300  = K278,500,
10
2
I would choose Firm A because the total amount earned over the 10 month period
is larger.

SECTION B: 40 MARKS

7. (a) (i) Use of scatter diagrams: By drawing a scatter graph of the two variables, the
pattern of points would suggest the existence or otherwise of a relationship.

(ii) Using measures of association such as correlation coefficient. A large value of

the correlation coefficient would suggest a strong degree of association between
the two variables.

[Also use of Regression analysis, Analysis of Variance when one variable is

nominal or ordinal and the other is interval or ratio]

(b) (i) Positive correlation because the higher the demand for laptops, the higher
the price, and vice- versa.

(ii) Negative correlation because when average temperatures are low the
demand for warm clothing increases, hence high sales.

(iii) Positive correlation because the higher the population, the more the
consumption and generation of waste, and vice versa.

(iv) Positive correlation because the higher the income, the more the tax that is
paid.
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(c) Need to look at the Present Values (PV) of the cash flows:

Year Discount Investment A Investment B Investment C

factor Inflow PV Inflow PV Inflow PV
1 0.9091 20000 18182 10000 9091 40000 36364
2 0.8264 20000 16528 15000 12396 30000 24792
3 0.7513 20000 15026 20000 15026 20000 15026
4 0.6830 20000 13660 25000 17075 - -
5 0.6209 20000 12418 30000 18627 - -
75814 72215 76182

As the outlay for each is the same, the investor should choose C since the PV is
the largest.

8. (a) (i) Tabulation – this involves organizing data into groups or classifying data
and putting the organized data into rows and columns i.e. table.
Example – frequency tables or simply tables.

(ii) Graphical presentation – this involves presenting the data using graphs
which are used to present either discrete or continuous data. .
Example – bar charts (pie charts, line graphs)

(b) (i) A ‘base year weighted’ index measures the relationship between the total
cost of base year quantities at current prices with the total cost of base year
quantities at base year prices. On the other hand, a ‘current year’ weighted
index measures the relationship between the total cost of current quantities
at current prices with the total cost of current quantities at base year prices.

(ii) I. Simple aggregate price index:

Sector Number of employees Weekly wages (K’00)

2000 2005 2012 2000 2005 2012
q0 q1 q3 p0 p1 p2

Technical 180 210 225 470 505 540

Skilled 270 230 180 355 360 375
Operations 450 340 220 275 255 250
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Simple aggregate price index, I =

p 1
100
p 0

505  360  255 1120

Hence for 2000, I =  100  101.82 ,
470  355  275 1100
540  375  250 1165
For 2012,  100  105.91 ,
470  355  275 1100

(II) the Laspeyres price index for 2012 =

p q2 0
100 .
p q0 0

540 180  375  270  250  450

= 100 ,
470 180  355  270  275  450

310950
= 100  102.22 ,
304200

(III) the Paasche quantity index for 2005 = .

pq 1 1
100
pq 1 0

505  210  360  230  255  340

= 100 ,
505 180  270  230  255  450

275550
= 100  90.99 ,
302850

x2 x
9. (a) Since P( x)  12 x   1000 , then P ( x)  12  ,
50 25
x
(i) Maximum profit results when P ( x)  0 or 12  0,
25
x
12  or x  300 ,
25
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x
(ii) Since P ( x)  12  , then the marginal profit when 350 cameras are sold
25
350
is P (350)  12  = - 2, .
25
Interpretation: At a production level of 350 cameras, a unit increase in
production will decrease profit by approximately K2.

(b) (i) Scatter diagram

M1 (Titled axes), M1 (Scale), A2 (Plotting points)

(ii) Least squares regression line is Y  a  bx , where

n xy   x  y 
b and a  y  b x
n x 2   x 
2

Now n = 12,  x  254 ,  y  62.1 ,  xy  1136 ,  x 2

 7392 ,

12 1136  254  62.5

Then b   0.08853 ,
12  7392  254 2

  .08853 
62.1 254
a  7.0489 ,
12 12
Then Y  a  bx = Y  7.0489  0.08853x ,
(iv) A car that has travelled 25000 km – then x  25
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So predicated price is Y  7.0489  0.08853 25  4.835629 ,

i.e. will cost about K4.84 million,

END