Gce Model Questions Vol1 2024 Commerce Question 5

Practice essay / theory question 5 from the 2024 Gce Model Questions Vol1 Commerce examination. This question covers Retail Trade .

Gce Model Questions Vol1 2024 Commerce Essay / Theory
Topic: Retail Trade
Question 5 GCE_MODEL_QUESTIONS_VOL1 • 2024 • COMMERCE • essay

A small retail shop sells two products, Product A and Product B. The shop purchases each unit of Product A at ₦1,200 and each unit of Product B at ₦800. The shop incurs monthly fixed overheads of ₦150,000 (rent, salaries, utilities). The shop sets the selling price of Product A at ₦1,800 per unit and Product B at ₦1,200 per unit. The shop also runs a promotion in the first month offering a 10 % discount on the selling price of Product A. The shop expects to sell 150 units of Product A and 200 units of Product B during that month. Answer the following:

Question Parts

( a )
Calculate the contribution margin per unit for Product A and Product B (selling price minus purchase cost).
( b )
Determine the break‑even number of units for each product if the shop sold only that product (i.e., fixed overheads are covered solely by the sales of the product).
( c )
During the promotional month the shop sells 150 units of Product A at the discounted price and 200 units of Product B at the normal price. Calculate the profit (or loss) for that month and state whether the promotion is financially advisable.

Detailed Solution & Marking Scheme

Get the step-by-step solution, key points required by examiners and detailed marking guidance through the Edcrib AI Tutor.

Reveal Answer

About This Question

This is Gce Model Questions Vol1 2024 Commerce Question 5. It is one of the essay questions from the 2024 Gce Model Questions Vol1 Commerce examination.

The question covers Retail Trade .

View More Gce Model Questions Vol1 2024 Commerce Questions More Gce Model Questions Vol1 Practice Questions Back to Questions

Master the Exam!

You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.

Unlock Full Access Available for Android & Windows
Chat with Support