Waec Model Questions Vol1 2023 Commerce Question 3

Practice essay / theory question 3 from the 2023 Waec Model Questions Vol1 Commerce examination. This question covers Home Trade, Cost‑Volume‑Profit Analysis .

Waec Model Questions Vol1 2023 Commerce Essay / Theory
Topics: Home Trade Cost‑Volume‑Profit Analysis
Question 3 WAEC_MODEL_QUESTIONS_VOL1 • 2023 • COMMERCE • essay

A small retail shop sells two products, A and B. The shop incurs fixed costs of ₦120,000 per month. The selling price and variable cost per unit for each product are: - Product A: selling price ₦5,000; variable cost ₦3,200 per unit. - Product B: selling price ₦7,500; variable cost ₦5,400 per unit. The owner wishes to determine the sales volume needed to achieve a target profit of ₦150,000 and to explore ways of increasing profit without altering selling prices.

Question Parts

( a )
Calculate the contribution margin per unit for Product A and for Product B.
( b )
If the shop decides to sell only Product A, how many units of Product A must be sold in a month to earn a profit of ₦150,000?
( c )
The owner now plans to sell a mix of the two products such that 60 % of the total units sold are Product A and 40 % are Product B. Determine the total number of units (rounded up to the nearest whole unit) that must be sold to achieve the same target profit of ₦150,000. Also state the approximate number of units of each product required.
( d )
Discuss two non‑price strategies the retailer could adopt to increase profit without changing the selling prices of the products.

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About This Question

This is Waec Model Questions Vol1 2023 Commerce Question 3. It is one of the essay questions from the 2023 Waec Model Questions Vol1 Commerce examination.

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

View More Waec Model Questions Vol1 2023 Commerce Questions More Waec Model Questions Vol1 Practice Questions Back to Questions

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