Neco 2019 Commerce Question 3

Practice essay / theory question 3 from the 2019 Neco Commerce examination. This question covers Home Trade, Pricing, Markup, Discount, Break-even .

Neco 2019 Commerce Essay / Theory

Topics: Home Trade Pricing Markup Discount Break-even

Question 3 NECO • 2019 • COMMERCE • essay

A small retailer purchases a batch of 500 units of a product at a total cost of ₦250,000. The retailer intends to sell the product in the local market and must decide on a pricing strategy that covers costs, allows for a desired profit margin, and remains competitive. The retailer expects that 20% of the units will be sold at a promotional discount of 10% off the regular selling price, while the remaining units will be sold at the regular price.

Question Parts

( a )

Calculate the regular selling price per unit that will give the retailer a profit margin of 25% on the total cost of the batch, ignoring the effect of the promotional discount.

( b )

Based on the regular price found in (a), determine the overall average selling price per unit after applying the 10% discount to the 20% of units sold at promotion.

( c )

Assess whether the retailer will achieve the intended 25% profit margin after the promotional discount is applied. Show your calculation and state the actual profit margin percentage.

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 Neco 2019 Commerce Question 3. It is one of the essay questions from the 2019 Neco Commerce examination.

The question covers Home Trade, Pricing, Markup, Discount, Break-even .

View More Neco 2019 Commerce Questions More Neco 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