Waec Model Questions Vol1 2021 Commerce Question 4

Practice essay / theory question 4 from the 2021 Waec Model Questions Vol1 Commerce examination. This question covers Foreign Trade, Exchange Rate, Import Duty, Costing, Pricing .

Waec Model Questions Vol1 2021 Commerce Essay / Theory
Topics: Foreign Trade Exchange Rate Import Duty Costing Pricing
Question 4 WAEC_MODEL_QUESTIONS_VOL1 • 2021 • COMMERCE • essay

A Nigerian import‑export firm plans to import 2,000 kilograms of cocoa beans from Ghana. The FOB (Free on Board) price quoted by the Ghanaian supplier is US$2.20 per kilogram. The current exchange rate is ₦460 per US$. The firm must also pay a 5 % import duty, a 2 % value‑added tax (VAT) on the landed cost, and a handling charge of ₦12,000 per shipment.

Question Parts

( a )
Calculate the total cost in Naira that the firm will incur to bring the cocoa beans into Nigeria (landed cost), showing all intermediate steps.
( b )
If the firm intends to earn a net profit margin of 18 % on the landed cost, determine the minimum selling price per kilogram in Naira.
( c )
Assume the Naira depreciates to ₦480 per US$ before the shipment arrives, while all other charges remain unchanged. Re‑calculate the landed cost and discuss the impact of exchange‑rate fluctuation on the firm’s profitability and pricing strategy.

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About This Question

This is Waec Model Questions Vol1 2021 Commerce Question 4. It is one of the essay questions from the 2021 Waec Model Questions Vol1 Commerce examination.

The question covers Foreign Trade, Exchange Rate, Import Duty, Costing, Pricing .

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