Neco 2020 Commerce Question 5

Practice essay / theory question 5 from the 2020 Neco Commerce examination. This question covers Retail Trade .

Neco 2020 Commerce Essay / Theory

Topic: Retail Trade

Question 5 NECO • 2020 • COMMERCE • essay

A retail shop sells three products – Product X, Product Y and Product Z. The following information is available for the most recent month:

Question Parts

( a )

Calculate the gross profit earned on each product. Use the formula Gross Profit = (Selling Price – Cost Price) × Quantity Sold.

( b )

Determine the markup percentage for each product. Markup % = (Gross Profit ÷ Cost Price) × 100.

( c )

Based on the results above, advise the shop owner which product should be promoted more aggressively and justify your recommendation with reference to profitability and inventory turnover (given that the stock turnover ratios are: X = 4, Y = 6, Z = 3).

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About This Question

This is Neco 2020 Commerce Question 5. It is one of the essay questions from the 2020 Neco Commerce examination.

The question covers Retail Trade .

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