Neco 2017 Commerce Question 3

Practice essay / theory question 3 from the 2017 Neco Commerce examination. This question covers Home Trade, Markup and discount, Break‑even analysis, Profit calculation .

Neco 2017 Commerce Essay / Theory

Topics: Home Trade Markup and discount Break‑even analysis Profit calculation

Question 3 NECO • 2017 • COMMERCE • essay

A trader purchases 200 units of a product at a cost of ₦150 per unit. He intends to apply a markup of 40 % on the cost price to set his initial selling price. To encourage bulk purchases, he offers a discount of 10 % on the selling price to customers who buy more than 50 units. His fixed overheads for the month amount to ₦20,000.

Question Parts

( a )

Calculate the initial selling price per unit before any discount.

( b )

Determine the selling price per unit after the 10 % discount for bulk buyers.

( c )

If all sales are to bulk buyers (i.e. at the discounted price), calculate the break‑even quantity of units.

( d )

During the month the trader sells 120 units to bulk buyers and the remaining 80 units at the initial price. Compute the total profit (or loss) for the month.

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About This Question

This is Neco 2017 Commerce Question 3. It is one of the essay questions from the 2017 Neco Commerce examination.

The question covers Home Trade, Markup and discount, Break‑even analysis, Profit calculation .

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