bece model questions vol1 2023 business_studies | Practical

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Question 1 View Details
A student visited the local bakery ‘Sweet Treats’ and recorded the information shown below. - Business name: Sweet Treats - Primary activity: baking and selling cupcakes, pastries and drinks - Capital invested by the owner: ₦200,000 - Ownership: single individual named Mrs Adaeze Okafor - Number of employees: 4 (including the owner) - Fixed monthly costs: • Rent: ₦30,000 • Salaries (including owner’s draw): ₦45,000 • Utilities (electricity & water): ₦5,000 - Variable cost per cupcake (ingredients, packaging, labour): ₦1,300 - Selling price per cupcake: ₦2,500 - Other items sold (pastries, drinks) generate an average profit of ₦800 per unit sold. Using this information answer the questions that follow.
Question Parts
(a)
State the type of business (goods or services) and give two pieces of evidence from the data to justify your answer.
(b)
Identify the form of ownership of Sweet Treats and explain one advantage and one disadvantage of this form for the bakery.
(c)
Using the fixed monthly costs and the profit per cupcake, calculate the number of cupcakes that must be sold each month to break even. Then state the break‑even sales revenue in naira.
(d)
Suggest two realistic ways Sweet Treats could increase its monthly profit without raising its fixed costs. Briefly explain why each would be effective.
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Question 2 View Details
Green Supplies Ltd. is preparing its office expense report for the month of March. The following raw data were recorded: - Stationery: ₦12,500 - Telephone: ₦8,750 - Electricity: ₦15,200 - Water: ₦2,400 - Rent: ₦45,000 - Salaries: ₦120,000 - Miscellaneous: ₦5,600 - Number of invoices processed in March: 23 Using this information answer the questions that follow.
Question Parts
(a)
Prepare a properly formatted expense report for March. The report should show each expense item, the amount in naira, and a total line. Use a standard office layout with a heading, two columns (Item, Amount) and a clearly marked total.
(b)
Calculate the average expense per invoice processed in March and comment on whether the expense pattern suggests any inefficiency.
(c)
The company aims to reduce total office expenses by 10 % next month. Propose two specific cost‑saving measures that could be implemented in the office and explain briefly how each would help achieve the target reduction.
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Question 3 View Details
A small retail shop sells three items as shown in the sales order below. Item Quantity Unit Price (₦) A 40 250 B 25 480 C 15 1,200 The shop applies a 5 % discount on the total purchase when the total before discount exceeds ₦20,000 and then adds 7.5 % VAT on the amount after discount. The cost price per unit of the items are: Item Cost Price per unit (₦) A 150 B 300 C 900 A draft invoice prepared by the shop assistant shows the following statements: (i) VAT was calculated on the discounted amount. (ii) The discount was applied to each line item instead of the total. (iii) The total payable was written as ₦28,950. Using the information above, answer the questions that follow.
Question Parts
(a)
Prepare a sales invoice showing for each item: quantity, unit price, line total, the total before discount, the discount amount, the net amount after discount, the VAT amount and the final amount payable.
(b)
Using the cost prices given, calculate the gross profit on this transaction (ignore VAT for profit calculation).
(c)
Identify which of the three statements (i)–(iii) in the draft invoice are actually errors and state the correct total payable.
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Question 4 View Details
A customer bought a blender from XYZ Ltd. on 15 March 2023 (Order No. 2023/045). After two days the blender stopped working. The customer wishes to write a formal letter of complaint requesting a replacement. Using the information given, answer the following tasks.
Question Parts
(a)
Write the opening paragraph of the letter addressed to "Mr. Adewale, Sales Manager, XYZ Ltd." Include the reference to the order number and the date the product was received.
(b)
Write the closing paragraph, requesting a replacement and providing the customer’s contact details.
(c)
List three essential features of effective business communication that are illustrated in the letter you have written.
(d)
The following draft paragraph is part of the same letter: "I am writing to inform you that the blender I bought from you is not working. It stopped after two days, and I am very angry." Identify two language errors and suggest improvements.
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Question 5 View Details
A small retailer intends to purchase inventory worth ₦1,200,000. He can finance the purchase in one of two ways: 1. Obtain a bank loan of ₦1,200,000 at 12% per annum payable monthly over 3 years. A processing fee of 2% of the loan amount is charged at the start of the loan. 2. Use trade credit from his supplier. The supplier offers a 5% discount if the invoice is paid within 30 days; otherwise the full amount is payable after 90 days. The retailer’s projected cash inflows from sales for the first six months are: | Month | Cash inflow (₦) | |-------|-----------------| | 1 | 300,000 | | 2 | 320,000 | | 3 | 340,000 | | 4 | 360,000 | | 5 | 380,000 | | 6 | 400,000 | From month 7 onwards, cash inflows are expected to increase by 5 % each month over the previous month. Monthly operating expenses (excluding any loan repayment) are constant at ₦150,000. Answer the following: a) Calculate the monthly repayment amount (rounded to the nearest naira) using the reducing‑balance method, the total interest payable over the 3‑year period, and the total amount payable including the processing fee. b) Using the cash‑flow forecast, determine after how many months the retailer will have accumulated a cash surplus (after meeting operating expenses and the monthly loan repayment) sufficient to settle the outstanding loan balance early, assuming any surplus can be used as a lump‑sum payment at the end of a month. c) Compare the total cost of financing under the bank loan (as obtained in part a) with the cost of using trade credit for the first purchase of inventory (i.e., the amount payable if the discount is not taken). State which option is more economical and justify with calculations. d) Identify two possible sources of error that could affect the accuracy of the cash‑flow‑based decision in part b and suggest one precaution for each.
Question Parts
(a)
Calculate the monthly repayment amount (rounded to the nearest naira) using the reducing‑balance method, the total interest payable over the 3‑year period, and the total amount payable including the processing fee.
(b)
Using the cash‑flow forecast, determine after how many months the retailer will have accumulated a cash surplus (after meeting operating expenses and the monthly loan repayment) sufficient to settle the outstanding loan balance early, assuming any surplus can be used as a lump‑sum payment at the end of a month.
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