Waec Model Questions Vol1 2020 Commerce Question 3

Practice essay / theory question 3 from the 2020 Waec Model Questions Vol1 Commerce examination. This question covers Home Trade .

Waec Model Questions Vol1 2020 Commerce Essay / Theory
Topic: Home Trade
Question 3 WAEC_MODEL_QUESTIONS_VOL1 • 2020 • COMMERCE • essay

A trader in Lagos deals in electronic gadgets. In January, he purchased 200 units of a model of smartphone at a listed price of ₦25,000 per unit. The supplier offered a cash discount of 5% on the total invoice if payment is made within 10 days, and a further trade discount of 3% on the amount after the cash discount. The trader also incurs a fixed overhead cost of ₦300,000 for the month (rent, salaries, utilities).

Question Parts

( a )
Calculate the total cost incurred by the trader for the 200 units, including the two discounts and the overheads.
( b )
The trader wishes to earn a profit of 20 % on the total cost (including overheads). Determine the selling price per unit he should set.
( c )
If the market will only bear a maximum selling price of ₦30,000 per unit, calculate the minimum number of units the trader must sell to at least break even (i.e., to cover total cost). State whether the target profit of 20 % is achievable under this market constraint.

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About This Question

This is Waec Model Questions Vol1 2020 Commerce Question 3. It is one of the essay questions from the 2020 Waec Model Questions Vol1 Commerce examination.

The question covers Home Trade .

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