bece model questions vol1 2022 business_studies | Practical

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Question 1 View Details
Ada intends to start a small bakery called “Sweet Treats” in Lagos. She will produce cakes, pastries and bread. Expected monthly sales are 200 cakes, 300 pastries and 500 loaves. Selling prices are ₦1,200 per cake, ₦800 per pastry and ₦500 per loaf. Variable costs are ₦700 per cake, ₦450 per pastry and ₦300 per loaf. Fixed costs (rent, utilities, salaries) are estimated at ₦250,000 per month. Ada has ₦150,000 of personal savings and can obtain a loan at 12 % per annum, repayable over 2 years. The total start‑up cost (equipment, initial inventory, licences) is ₦600,000.
Question Parts
(a)
Identify the type of business Ada is planning to operate and discuss two advantages and two disadvantages of this type in the context of her bakery.
(b)
Calculate the monthly break‑even point in units for each product category, assuming the three products are sold in the same proportion as the expected sales (ratio 200 : 300 : 500). Show all steps.
(c)
Determine the minimum external financing Ada needs to meet the start‑up cost of ₦600,000. Using her savings first, calculate the monthly loan repayment (simple interest) and state whether the projected monthly profit after reaching break‑even will be sufficient to meet the repayment.
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Question 2 View Details
You are the office clerk for Green Trade Ltd, a medium‑size trading company. The manager asks you to (i) prepare a formal business letter requesting a quotation for 50 units of a product, (ii) decide where to file the new “Supply Agreement – Green Trade Ltd and Alpha Supplies”, and (iii) calculate the postage and total cost of sending the letter.
Question Parts
(a)
Draft a business letter (maximum 120 words) to the supplier requesting a quotation for 50 units. Use the correct letter format and list three key elements that must appear in the heading of the letter.
(b)
Green Trade Ltd uses a three‑drawer filing system: alphabetical (A‑M), numerical (1‑500) and subject (Contracts). State which drawer the new contract titled “Supply Agreement – Green Trade Ltd and Alpha Supplies” should be placed in and justify your choice.
(c)
The post office charges ₦150 for the first 50 g and ₦30 for each additional 20 g (or part thereof). The letter weighs 68 g. Calculate the total postage cost, showing the steps.
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Question 3 View Details
A small retail shop sold three items during the week of 1–7 June. The details of the sales are shown in the table below. All sales are subject to a 5% discount on the subtotal and a value‑added tax (VAT) of 7.5% on the discounted amount. The cost price of each item is also given. | Item | Quantity sold | Unit selling price (₦) | Unit cost price (₦) | |------|---------------|------------------------|---------------------| | A | 48 | 1,200 | 800 | | B | 35 | 2,500 | 1,800 | | C | 27 | 3,750 | 2,500 | Using the information above, answer the following: a) Prepare a sales invoice for the week showing, for each item, the subtotal, discount amount, VAT amount and total amount payable. b) State the total revenue earned by the shop for the week. c) Calculate the gross profit for the week (revenue minus cost of goods sold). d) Identify two possible sources of error that could arise when preparing the invoice.
Question Parts
(a)
Prepare a sales invoice for the week showing, for each item, the subtotal, discount amount, VAT amount and total amount payable.
(b)
State the total revenue earned by the shop for the week.
(c)
Calculate the gross profit for the week (revenue minus cost of goods sold).
(d)
Identify two possible sources of error that could arise when preparing the invoice.
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Question 4 View Details
The head of the school library has noticed that the collection of textbooks is outdated and that many students are unable to find the books they need for their examinations. The school principal has asked the student council to propose a plan for improving the library. As the secretary of the student council, you are required to communicate this request to the library manager. Answer the following: a) Write a formal letter to the library manager requesting a meeting to discuss the improvement of the library. Ensure the letter contains an appropriate heading, date, reference, salutation, body, closing and signature. b) Identify three features of effective business communication that are demonstrated in your letter. c) Suggest two ways the letter could be made more persuasive.
Question Parts
(a)
Write a formal letter to the library manager requesting a meeting to discuss the improvement of the library. Ensure the letter contains an appropriate heading, date, reference, salutation, body, closing and signature.
(b)
Identify three features of effective business communication that are demonstrated in your letter.
(c)
Suggest two ways the letter could be made more persuasive.
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Question 5 View Details
A small business keeps a monthly bank statement for March. The following information is recorded: - Opening balance on 1 March: ₦150,000 - 3 March: Rent paid – ₦40,000 - 5 March: Cash sales deposited – ₦100,000 - 10 March: Salaries paid – ₦60,000 - 12 March: Bank transfer received – ₦150,000 - 18 March: Purchase of inventory – ₦80,000 - 20 March: Loan received – ₦200,000 - 25 March: Electricity bill paid – ₦5,000 - Monthly service charge: ₦2,000 (deducted at month‑end) - Interest rate on the average daily balance: 3% per annum, credited at month‑end (interest is calculated on the average daily balance for the month). The bank’s loan eligibility criteria are: 1. Average daily balance must be at least ₦200,000. 2. Debt‑service‑coverage‑ratio (DSCR) must be at least 1.2, where DSCR = (Net cash inflow after interest and service charge) ÷ (Monthly debt repayment). The required monthly debt repayment for the loan is ₦30,000. Using the data above, answer the following: a) Determine the closing balance on 31 March after interest has been credited and the service charge deducted. b) Calculate the average daily balance for the month. c) i) Compute the amount of interest earned for March. ii) State the effective annual interest rate if the monthly interest is compounded. d) i) Calculate the DSCR for the business. ii) Based on the bank’s criteria, state whether the business qualifies for the loan and give a brief justification.
Question Parts
(a)
Determine the closing balance on 31 March after interest has been credited and the service charge deducted.
(b)
Calculate the average daily balance for the month.
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