Gce Model Questions Vol1 2022 Commerce Question 5

Practice essay / theory question 5 from the 2022 Gce Model Questions Vol1 Commerce examination. This question covers Retail Trade .

Gce Model Questions Vol1 2022 Commerce Essay / Theory
Topic: Retail Trade
Question 5 GCE_MODEL_QUESTIONS_VOL1 • 2022 • COMMERCE • essay

A retailer deals in two product lines – smartphones and headphones. The following information is given for a typical month: - Cost price per smartphone: ₦150,000 - Selling price per smartphone: ₦200,000 - Cost price per headphone: ₦15,000 - Selling price per headphone: ₦25,000 - Fixed overheads (rent, salaries, utilities): ₦500,000 per month - The retailer expects the sales mix to be 60 % smartphones and 40 % headphones. - If a retailer purchases more than 20 smartphones in a single order, a 5 % discount on the selling price of each smartphone is offered. Answer the following questions:

Question Parts

( a )
Calculate the gross profit per unit for a smartphone and for a headphone.
( b )
Using the expected sales mix, determine the total number of units (both products combined) the retailer must sell in the month to cover the fixed overheads (i.e., the break‑even quantity). State the corresponding number of smartphones and headphones required.
( c )
If the 5 % discount on smartphones is applied to every smartphone sale when more than 20 smartphones are bought in a month, recalculate the break‑even total units and the required numbers of each product. Comment on how the discount affects the break‑even point.
( d )
Based on your calculations, recommend a pricing or discount policy for the retailer that balances competitiveness with profitability. Justify your recommendation in 2–3 sentences.

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About This Question

This is Gce Model Questions Vol1 2022 Commerce Question 5. It is one of the essay questions from the 2022 Gce Model Questions Vol1 Commerce examination.

The question covers Retail Trade .

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