Bece Model Questions Vol1 2022 Business Studies Question 1

Practice practical question 1 from the 2022 Bece Model Questions Vol1 Business Studies examination. This question covers Introduction to Business .

Bece Model Questions Vol1 2022 Business Studies Practical
Topic: Introduction to Business
Question 1 BECE_MODEL_QUESTIONS_VOL1 • 2022 • BUSINESS_STUDIES • practical

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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About This Question

This is Bece Model Questions Vol1 2022 Business Studies Question 1. It is one of the practical questions from the 2022 Bece Model Questions Vol1 Business Studies examination.

The question covers Introduction to Business .

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