Gce Model Questions Vol1 2020 Commerce Question 6

Practice essay / theory question 6 from the 2020 Gce Model Questions Vol1 Commerce examination. This question covers Wholesale Trade .

Gce Model Questions Vol1 2020 Commerce Essay / Theory
Topic: Wholesale Trade
Question 6 GCE_MODEL_QUESTIONS_VOL1 • 2020 • COMMERCE • essay

A wholesale distributor purchases electronic gadgets from a manufacturer at a unit cost of ₦15,000. The distributor adds a wholesale margin of 25 % to determine the wholesale price charged to retailers. Retailers then apply a 30 % markup to set the final selling price to consumers. The distributor incurs variable costs of ₦1,200 per unit (transport, handling) and fixed monthly costs of ₦80,000 (warehouse rent, staff). In a typical month the distributor sells 500 units.

Question Parts

( a )
Determine the wholesale price per unit charged to retailers.
( b )
Compute the total revenue, total variable cost, and contribution margin for the month.
( c )
Calculate the break‑even volume (in units) for the distributor, considering both variable and fixed costs.
( d )
If the distributor offers a seasonal discount of 10 % on the wholesale price to retailers, but expects a 20 % increase in sales volume, evaluate whether the discount will increase the distributor’s net profit. Show calculations and justify your answer.

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About This Question

This is Gce Model Questions Vol1 2020 Commerce Question 6. It is one of the essay questions from the 2020 Gce Model Questions Vol1 Commerce examination.

The question covers Wholesale Trade .

View More Gce Model Questions Vol1 2020 Commerce Questions More Gce Model Questions Vol1 Practice Questions Back to Questions

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