Cambridge International AS & A Level ACCOUNTING 9706/42 Paper 4 Cost and Management Accounting February/March 2025 INSERT 1 hour * 4 4 6 3 3 2 6 4 7 8 - I * INFORMATION ● This insert contains all of the sources referred to in the questions. ● You may annotate this insert and use the blank spaces for planning. Do not write your answers on the insert. This document has 4 pages. Any blank pages are indicated. DC (PQ) 340826/2 © UCLES 2025 [Turn over

Cambridge International AS & A Level
ACCOUNTING 9706/42
Paper 4 Cost and Management Accounting February/March 2025
INSERT 1 hour
* 4 4 6 3 3 2 6 4 7 8 - I *
INFORMATION
● This insert contains all of the sources referred to in the questions.
● You may annotate this insert and use the blank spaces for planning. Do not write your answers on the
insert.
This document has 4 pages. Any blank pages are indicated.
DC (PQ) 340826/2
© UCLES 2025 [Turn over

2 Source A for Question 1 T plc is a manufacturing business which uses activity based costing (ABC) to apportion certain costs. The following information is available. 1 The company manufactures two products: X and Y. Annual production is 1000 units of X and 3000 units of Y. 2 The unit production costs of the products are as follows: X Y $ $ Direct materials 14.00 15.00 Direct labour 12.00 15.00 Direct overheads 10.00 11.00 Quality inspections 2.34 1.30 Machine set-ups 3.60 1.95 Factory rent 6.00 6.00 Total 47.94 50.25 3 Costs are apportioned using the following bases. X Y Quality inspections per year 300 500 Machine set-ups per year 40 65 Factory rent per unit 4 Selling prices are set at production cost plus 50%. © UCLES 2025 9706/42/INSERT/F/M/25

2
Source A for Question 1
T plc is a manufacturing business which uses activity based costing (ABC) to apportion certain costs.
The following information is available.
1 The company manufactures two products: X and Y.
Annual production is 1000 units of X and 3000 units of Y.
2 The unit production costs of the products are as follows:
X Y
$ $
Direct materials 14.00 15.00
Direct labour 12.00 15.00
Direct overheads 10.00 11.00
Quality inspections 2.34 1.30
Machine set-ups 3.60 1.95
Factory rent 6.00 6.00
Total 47.94 50.25
3 Costs are apportioned using the following bases.
X Y
Quality inspections per year 300 500
Machine set-ups per year 40 65
Factory rent per unit
4 Selling prices are set at production cost plus 50%.
© UCLES 2025 9706/42/INSERT/F/M/25

3 Source B for Question 2 AG plc uses a system of budgetary control. The company prepared the following budgets for periods ending March 2026. 1 Sales budget (all on credit) $ November 96 000 December 88 000 January 102 000 February 100 000 March 92 000 2 Trade receivables budget January February March $ $ $ Balance b/f 164 800 172 400 181 600 Sales 102 000 100 000 92 000 266 800 272 400 273 600 Receipts – one month after sale (17 600) (20 400) (20 000) Receipts – two months after sale (76 800) (70 400) (81 600) Balance c/f 172 400 181 600 172 000 3 Budgeted statement of financial position at 31 March 2026 $ Non-current assets 426 000 Current assets Inventory 91 000 Trade receivables 172 000 Total assets 689 000 Equity Share capital 500 000 Retained earnings 77 320 Current liabilities Bank overdraft 22 180 Trade payables 89 500 Total equity and liabilities 689 000 © UCLES 2025 9706/42/INSERT/F/M/25

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Source B for Question 2
AG plc uses a system of budgetary control.
The company prepared the following budgets for periods ending March 2026.
1 Sales budget (all on credit)
$
November 96 000
December 88 000
January 102 000
February 100 000
March 92 000
2 Trade receivables budget
January February March
$ $ $
Balance b/f 164 800 172 400 181 600
Sales 102 000 100 000 92 000
266 800 272 400 273 600
Receipts – one month after sale (17 600) (20 400) (20 000)
Receipts – two months after sale (76 800) (70 400) (81 600)
Balance c/f 172 400 181 600 172 000
3 Budgeted statement of financial position at 31 March 2026
$
Non-current assets 426 000
Current assets
Inventory 91 000
Trade receivables 172 000
Total assets 689 000
Equity
Share capital 500 000
Retained earnings 77 320
Current liabilities
Bank overdraft 22 180
Trade payables 89 500
Total equity and liabilities 689 000
© UCLES 2025 9706/42/INSERT/F/M/25

4 BLANK PAGE Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every reasonable effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the publisher will be pleased to make amends at the earliest possible opportunity. To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge Assessment International Education Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download at www.cambridgeinternational.org after the live examination series. Cambridge Assessment International Education is part of Cambridge Assessment. Cambridge Assessment is the brand name of the University of Cambridge Local Examinations Syndicate (UCLES), which is a department of the University of Cambridge. © UCLES 2025 9706/42/INSERT/F/M/25

4
BLANK PAGE
Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every
reasonable effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the
publisher will be pleased to make amends at the earliest possible opportunity.
To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge
Assessment International Education Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download
at www.cambridgeinternational.org after the live examination series.
Cambridge Assessment International Education is part of Cambridge Assessment. Cambridge Assessment is the brand name of the University of Cambridge
Local Examinations Syndicate (UCLES), which is a department of the University of Cambridge.
© UCLES 2025 9706/42/INSERT/F/M/25

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