Neco 2021 Commerce Question 5

Practice essay / theory question 5 from the 2021 Neco Commerce examination. This question covers Retail Trade .

Neco 2021 Commerce Essay / Theory

Topic: Retail Trade

Question 5 NECO • 2021 • COMMERCE • essay

A retail shop sells two categories of goods. Category A consists of electronic items that cost ₦20,000 each. Category B consists of clothing items that cost ₦8,000 each. The shop applies a 30% markup on the cost of Category A and then offers a 10% discount on the marked price. For Category B the shop applies a 40% markup on the cost and offers a seasonal discount of 15% on the marked price. The shop incurs fixed monthly overheads of ₦150,000 and expects to sell 200 units of Category A and 300 units of Category B each month.

Question Parts

( a )

Determine the final selling price per unit of Category A after the markup and discount.

( b )

Determine the final selling price per unit of Category B after the markup and discount.

( c )

Using the selling prices obtained in (a) and (b): i. Calculate the total contribution (selling price minus cost) from each category for the expected monthly sales. ii. Calculate the number of units of each category that must be sold to cover the fixed overhead of ₦150,000 (break‑even).

( d )

Based on the contribution per unit, advise which category the retailer should prioritize if the aim is to maximise profit, assuming there is no limit on sales potential.

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About This Question

This is Neco 2021 Commerce Question 5. It is one of the essay questions from the 2021 Neco Commerce examination.

The question covers Retail Trade .

View More Neco 2021 Commerce Questions More Neco Practice Questions Back to Questions

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