Gce Model Questions Vol1 2024 Commerce Question 6

Practice essay / theory question 6 from the 2024 Gce Model Questions Vol1 Commerce examination. This question covers Wholesale Trade .

Gce Model Questions Vol1 2024 Commerce Essay / Theory
Topic: Wholesale Trade
Question 6 GCE_MODEL_QUESTIONS_VOL1 • 2024 • COMMERCE • essay

A wholesale distributor purchases a batch of 5,000 units of a consumer good at a purchase price of ₦500 per unit. The distributor pays a transport charge of ₦30,000 for the whole batch and incurs a monthly storage cost of ₦10 per unit for the month the goods are held. The distributor intends to sell the goods to retailers at a selling price of ₦800 per unit. Answer the following:

Question Parts

( a )
Calculate the total cost per unit (including purchase price, transport, and storage).
( b )
Determine the selling price per unit required to achieve a profit margin of 20 % on the total cost.
( c )
The distributor considers offering a 5 % cash‑discount to retailers who pay within 10 days, while the remaining retailers are given 30‑day credit with no discount. If 60 % of retailers take the cash‑discount, calculate the effective profit margin (percentage) on the whole batch.
( d )
Based on your calculations, advise whether the distributor should adopt the cash‑discount policy, considering both profitability and cash‑flow implications.

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About This Question

This is Gce Model Questions Vol1 2024 Commerce Question 6. It is one of the essay questions from the 2024 Gce Model Questions Vol1 Commerce examination.

The question covers Wholesale Trade .

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

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