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These are explanations and solutions for IB past papers, not the official version. For official papers, you can go to IB Follet or access them through your school.

01 Hours 45 Minutes

50 Marks

Calculator is allowed

IB BUSINESS MANAGEMENT SL, Paper 2, May, 2018, TZ0, Solved Past Paper

Master the 2018 IB May for Paper 2 Business Management SL with examiner tailored solutions and comments for TZ0

Question 1 [Explained]

Fishers is a company that manufactures baseball caps. In 2017, the company sold 75,000 caps. The variable cost per cap was $6.70. Fishers experiences a significant increase in current assets and current liabilities from March to October, which then start to decrease. The following tables provide additional financial information:

Sales revenue	Fixed costs
$900,000	$55,000

Increase in number of baseball caps sold	Increase in variable costs per cap	Fixed costs	Interest	Income tax expense
10%	$1.00	$55,000	$30,000	20% of net profit before tax

Question 1 [a] [Explanation]

This question asks you to define the term current assets.

Question 1 [b] [Explanation]

This question asks you to calculate Fishers's net profit before interest and tax for 2017 using the data provided in Table 1. Show all your working.

Question 1 [c] [Explanation]

This question asks you to calculate the following forecasted figures for 2018 using the data provided in Table 2:

Question 1 [c] [i] [Explanation]

Calculate the forecasted sales revenue for 2018.

Question 1 [c] [ii] [Explanation]

Calculate the forecasted total variable costs for 2018.

Question 1 [c] [iii] [Explanation]

Calculate the forecasted income tax for 2018.