Waec Model Questions Vol1 2017 Commerce Question 3

Practice essay / theory question 3 from the 2017 Waec Model Questions Vol1 Commerce examination. This question covers Home Trade, Cost‑Volume‑Profit Analysis .

Waec Model Questions Vol1 2017 Commerce Essay / Theory
Topics: Home Trade Cost‑Volume‑Profit Analysis
Question 3 WAEC_MODEL_QUESTIONS_VOL1 • 2017 • COMMERCE • essay

A young entrepreneur decides to start a home‑based tailoring business. She purchases a new sewing machine costing ₦120,000. She pays a 20 % down‑payment and the balance is financed in four equal monthly instalments. Her monthly operating costs are: rent ₦5,000, electricity ₦2,000. Each shirt requires fabric costing ₦1,200 and is sold for ₦3,500. Assume the instalment amount is the only monthly fixed cost related to the machine. Using this information, answer the following questions.

Question Parts

( a )
Determine the break‑even quantity of shirts the entrepreneur must sell each month.
( b )
If she wishes to earn a profit of ₦15,000 in a month, how many shirts must she sell?
( c )
Discuss two non‑financial factors that could affect the success of her home‑based tailoring business.
( d )
Suppose she raises the selling price by 10 % and, as a result, the quantity demanded falls by 8 % from the break‑even quantity found in part (a). Calculate the new monthly profit (or loss).

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About This Question

This is Waec Model Questions Vol1 2017 Commerce Question 3. It is one of the essay questions from the 2017 Waec Model Questions Vol1 Commerce examination.

The question covers Home Trade, Cost‑Volume‑Profit Analysis .

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