Waec Model Questions Vol1 2022 Commerce Question 3

Practice essay / theory question 3 from the 2022 Waec Model Questions Vol1 Commerce examination. This question covers Home Trade, Cost‑Volume‑Profit analysis, Pricing strategy .

Waec Model Questions Vol1 2022 Commerce Essay / Theory
Topics: Home Trade Cost‑Volume‑Profit analysis Pricing strategy
Question 3 WAEC_MODEL_QUESTIONS_VOL1 • 2022 • COMMERCE • essay

A young entrepreneur runs a home‑based business selling handcrafted wooden toys. The business incurs fixed monthly costs of ₦120,000 (rent, electricity, etc.). The variable cost of producing each toy is ₦2,500. The regular selling price per toy is ₦5,000 and the entrepreneur currently sells 120 toys each month.

Question Parts

( a )
Determine the break‑even quantity of toys per month at the regular selling price.
( b )
The entrepreneur offers a 10 % discount on the selling price for bulk orders of 50 toys or more. Calculate the new break‑even quantity for such bulk orders.
( c )
The entrepreneur is considering raising the regular selling price by 15 % but expects the monthly sales volume to fall by 20 %. Using the original fixed and variable costs, determine whether the expected profit will increase or decrease compared with the current profit at 120 toys per month. State the percentage change in profit.

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About This Question

This is Waec Model Questions Vol1 2022 Commerce Question 3. It is one of the essay questions from the 2022 Waec Model Questions Vol1 Commerce examination.

The question covers Home Trade, Cost‑Volume‑Profit analysis, Pricing strategy .

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