Waec Model Questions Vol1 2024 Commerce Question 5

Practice essay / theory question 5 from the 2024 Waec Model Questions Vol1 Commerce examination. This question covers Retail Trade .

Waec Model Questions Vol1 2024 Commerce Essay / Theory
Topic: Retail Trade
Question 5 WAEC_MODEL_QUESTIONS_VOL1 • 2024 • COMMERCE • essay

A retailer deals in two product lines, A and B. The following information is available for a typical month: - Purchase cost per unit: Product A = ₦2,500; Product B = ₦1,800. - Additional variable costs per unit: Packaging = ₦200 for A, ₦150 for B. - Selling price per unit: Product A = ₦3,500; Product B = ₦2,600. - Expected sales mix: 60 % of units sold are A and 40 % are B. - Fixed operating costs (rent, salaries, utilities) = ₦150,000. Answer the following questions:

Question Parts

( a )
Determine the contribution margin per unit for each product. Then calculate the weighted‑average contribution margin per unit based on the sales mix and compute the break‑even point in total units (round up to the nearest whole unit). Show all working.
( b )
The retailer decides to offer a 10 % discount on the selling price of Product A for a promotional period, while the sales mix remains unchanged. Re‑calculate the weighted‑average contribution margin and the new break‑even point in total units. Comment on the effect of the discount on the break‑even analysis.
( c )
Discuss two advantages of using a perpetual inventory system for this retailer.

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About This Question

This is Waec Model Questions Vol1 2024 Commerce Question 5. It is one of the essay questions from the 2024 Waec Model Questions Vol1 Commerce examination.

The question covers Retail Trade .

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