Gce Model Questions Vol1 2025 Commerce Question 2

A retailer in Nigeria wants to import 500 units of a gadget. Supplier A quotes an FOB price of \(\text{₦}2{,}400\) per unit. Freight from the port to the warehouse costs \(\text{₦}150\) per unit. Insurance is charged at 0.5 % of the CIF value (i.e., of the sum of FOB price and freight) per unit. Import duty is 12 % of the CIF value. Supplier B offers a CIF price of \(\text{₦}2{,}850\) per unit (including freight and insurance). No additional freight or insurance is required for Supplier B, and the import duty remains 12 % of the CIF value. (a) Calculate the landed cost per unit for each supplier. (b) Determine which supplier offers the lower landed cost. (c) If the retailer requires a profit margin of 18 % on the landed cost, compute the selling price per unit for the chosen supplier.