Neco 2018 Commerce Question 5

Practice essay / theory question 5 from the 2018 Neco Commerce examination. This question covers Retail Trade .

Neco 2018 Commerce Essay / Theory

Topic: Retail Trade

Question 5 NECO • 2018 • COMMERCE • essay

A retailer purchases 500 units of a product at a cost of ₦2,400 per unit. His fixed monthly costs amount to ₦150,000. He intends to sell each unit with a markup of 30 % on the cost price. After the first month, because of increased competition, he reduces the selling price by 5 %. Using this information, answer the following:

Question Parts

( a )

Calculate the original selling price per unit before the reduction.

( b )

Determine the number of units the retailer must sell in the first month to break even (before the price reduction).

( c )

After the 5 % reduction, calculate the new selling price, the new break‑even quantity and the percentage increase in units required compared with part (b).

( d )

If the retailer actually sells 600 units at the reduced price, compute his profit or loss for that month.

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About This Question

This is Neco 2018 Commerce Question 5. It is one of the essay questions from the 2018 Neco Commerce examination.

The question covers Retail Trade .

View More Neco 2018 Commerce Questions More Neco Practice Questions Back to Questions

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