Waec Model Questions Vol1 2017 Commerce Question 5

Practice essay / theory question 5 from the 2017 Waec Model Questions Vol1 Commerce examination. This question covers Retail Trade .

Waec Model Questions Vol1 2017 Commerce Essay / Theory
Topic: Retail Trade
Question 5 WAEC_MODEL_QUESTIONS_VOL1 • 2017 • COMMERCE • essay

A retailer purchases a batch of 500 units of a product at a total cost of ₦250,000. The retailer intends to apply a markup based on the cost price to achieve a desired profit margin. However, the retailer also offers a seasonal discount to customers. The retailer's fixed overheads for the month are ₦30,000. The retailer expects to sell all units within the month.

Question Parts

( a )
Determine the selling price per unit if the retailer wants to earn a profit of 20 % on the total cost of the batch (before considering overheads).
( b )
Calculate the break‑even number of units the retailer must sell if the selling price from part (a) is used and the overheads are incurred.
( c )
Suppose the retailer decides to give a 10 % discount on the selling price calculated in part (a) to stimulate sales. Re‑calculate the break‑even quantity under this discounted price.
( d )
Discuss two advantages and two disadvantages of using a discount strategy for a retailer in the context of the above scenario.

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About This Question

This is Waec Model Questions Vol1 2017 Commerce Question 5. It is one of the essay questions from the 2017 Waec Model Questions Vol1 Commerce examination.

The question covers Retail Trade .

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