Practice neco commerce 2022 Past Questions | Edcrib

Question 1 View Details

A warehouse manager faces an annual demand of \(D = 12{,}000\) units for a product. The ordering cost per order is \(S = \text{₦}500\). The holding cost is 25\% of the unit purchase price per year. The supplier offers the following price schedule: 1\u2013499 units: \(\text{₦}150\) each; 500\u2013999 units: \(\text{₦}140\) each; 1{,}000 units or more: \(\text{₦}130\) each. Assuming the Economic Order Quantity (EOQ) model applies, determine the order quantity that minimises the total annual cost and state that minimum total cost.

A. Order quantity = 1,200 units; Minimum total annual cost = ₦1,590,500

Correct B. Order quantity = 1,000 units; Minimum total annual cost = ₦1,582,250

C. Order quantity = 1,500 units; Minimum total annual cost = ₦1,605,750

D. Order quantity = 500 units; Minimum total annual cost = ₦1,610,000

Correct Answer: B

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Question 2 View Details

Three partners A, B and C invest in a business as follows: A invests \(\text{₦}50{,}000\) for 6 months, B invests \(\text{₦}30{,}000\) for 9 months, and C invests \(\text{₦}20{,}000\) for the whole 12 months. The partnership agreement gives partner A a fixed salary of \(\text{₦}20{,}000\) before profit sharing. If the total profit for the year is \(\text{₦}240{,}000\), determine the amount each partner receives.

A. A: ₦108,888.89; B: ₦80,000.00; C: ₦71,111.11

Correct B. A: ₦101,481.48; B: ₦73,333.33; C: ₦65,185.19

C. A: ₦140,000.00; B: ₦72,000.00; C: ₦48,000.00

D. A: ₦81,481.48; B: ₦73,333.33; C: ₦65,185.19

Correct Answer: B

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Question 3 View Details

A consumer buys a television that is advertised as "30\% off the marked price". The marked price is calculated as follows: the retailer adds a 20\% profit margin to the cost price and then adds 15\% VAT on the resulting amount. In reality the retailer applied the 30\% discount on the cost price, then added the 20\% profit margin on the original cost price and finally added 15\% VAT on the final amount. The cost price of the television is \(\text{₦}800\). Determine (a) the amount the consumer actually paid, (b) the amount that should have been paid according to the advertisement, (c) the over‑charge, and (d) the penalty, which is twice the over‑charge.

A. Actual price = ₦828.00; Advertised price = ₦560.00; Over‑charge = ₦268.00; Penalty = ₦536.00

Correct B. Actual price = ₦828.00; Advertised price = ₦772.80; Over‑charge = ₦55.20; Penalty = ₦110.40

C. Actual price = ₦828.00; Advertised price = ₦772.80; Over‑charge = ₦55.20; Penalty = ₦165.60

D. Actual price = ₦804.00; Advertised price = ₦772.80; Over‑charge = ₦31.20; Penalty = ₦62.40

Correct Answer: B

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Question 4 View Details

A wholesaler orders 800 units of a product. The manufacturer's price schedule is: up to 500 units - \(\text{₦}250\) each; 501 to 1{,}000 units - \(\text{₦}240\) each. Freight charges are 4\% of the total purchase amount after the trade discount. The wholesaler adds a markup of 30\% on the landed cost (purchase price plus freight) to set the wholesale price. A cash discount of 3\% is offered for payment within 15 days. Determine (a) the landed cost per unit, (b) the wholesale price per unit before cash discount, and (c) the cash price per unit.

A. Landed cost per unit = ₦240.00; Wholesale price per unit = ₦312.00; Cash price per unit = ₦302.64

B. Landed cost per unit = ₦249.60; Wholesale price per unit = ₦321.60; Cash price per unit = ₦311.95

C. Landed cost per unit = ₦252.00; Wholesale price per unit = ₦327.60; Cash price per unit = ₦317.77

Correct D. Landed cost per unit = ₦249.60; Wholesale price per unit = ₦324.48; Cash price per unit = ₦314.75

Correct Answer: D

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Question 5 View Details

A shop has fixed monthly costs of \(\text{₦}50{,}000\) and a variable cost of \(\text{₦}200\) per unit. Each unit is sold for \(\text{₦}350\). How many units must be sold each month to break even?

A. 350

B. 333

C. 300

Correct D. 334

Correct Answer: D

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Question 6 View Details

A firm subscribes to two telephone service plans. Plan X charges a monthly subscription of \(\text{₦}12{,}000\) and \(\text{₦}150\) per minute for the first 200 minutes, then \(\text{₦}100\) per additional minute. Plan Y charges a monthly subscription of \(\text{₦}15{,}000\) and a uniform rate of \(\text{₦}120\) per minute for all minutes. Determine the smallest whole number of minutes greater than 200 for which Plan X costs less than Plan Y. Then state the total monthly cost under Plan X for that number of minutes.

A. 352 minutes, ₦57,200

Correct B. 351 minutes, ₦57,100

C. 360 minutes, ₦58,200

D. 340 minutes, ₦55,800

Correct Answer: B

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Question 7 View Details

A retailer purchases 500 units of a product at \(\text{₦}2{,}400\) each. If payment is made within 5 days, a trade discount of 5% is applied to the invoice amount, and an additional cash discount of 2% is granted on the amount after the trade discount. The retailer wishes to apply a markup of 30% on his net cost to set the selling price per unit. Determine the selling price per unit when the discounts are taken, and compute the total profit if all units are sold at that price.

A. Selling price per unit = ₦3,060.72; Total profit = ₦353,160

B. Selling price per unit = ₦2,901.60; Total profit = ₦334,800

Correct C. Selling price per unit = ₦2,904.72; Total profit = ₦335,160

D. Selling price per unit = ₦2,964.00; Total profit = ₦342,000

Correct Answer: C

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Question 8 View Details

A company's share is currently priced at \(\text{₦}850\). The most recent dividend paid was \(\text{₦}45\). Assuming a constant dividend growth rate \(g\) and a required rate of return of 12% per annum, use the Gordon growth model to find the implied growth rate \(g\). Then, using this growth rate, calculate the expected share price at the end of year 5.

A. Growth rate ≈ 7.00%; Price at end of year 5 ≈ ₦1,250

Correct B. Growth rate ≈ 6.37%; Price at end of year 5 ≈ ₦1,157

C. Growth rate ≈ 5.50%; Price at end of year 5 ≈ ₦1,080

D. Growth rate ≈ 6.00%; Price at end of year 5 ≈ ₦1,130

Correct Answer: B

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Question 9 View Details

An advertiser plans a 4‑week TV campaign. Each day the ad will be aired \(a\) times on Channel A (rating \(4.5\) points per airing, cost \(\text{₦}150{,}000\) per airing) and \(b\) times on Channel B (rating \(3.2\) points per airing, cost \(\text{₦}120{,}000\) per airing). The target market size is 2,000,000 people. The campaign must achieve at least 250 GRPs and the total cost must not exceed \(\text{₦}30{,}000{,}000\). Determine the minimum integer values of \(a\) and \(b\) (both at least 1) that satisfy both constraints while minimizing the total daily airings \(a+b\). Also give the total GRPs and total cost for the whole 4‑week period using those values.

Correct A. a = 1, b = 2; Total GRPs = 305.2; Total cost = ₦10,920,000

B. a = 1, b = 3; Total GRPs = 394.8; Total cost = ₦14,280,000

C. a = 2, b = 2; Total GRPs = 431.2; Total cost = ₦15,120,000

D. a = 2, b = 1; Total GRPs = 341.6; Total cost = ₦11,760,000

Correct Answer: A

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Question 10 View Details

A trader buys 5,000 US dollars at an exchange rate of \(\text{₦}460\) per dollar and pays a commission of 1.5% on the naira amount. He later sells the dollars at \(\text{₦}475\) per dollar with no commission. Determine the trader's profit or loss in naira.

A. Profit of ₦39,375

Correct B. Profit of ₦40,500

C. Profit of ₦75,000

D. Loss of ₦110,625

Correct Answer: B

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Question 11 View Details

Three partners A, B and C invested in a business. A contributed ₦120,000 for 6 months, B contributed ₦80,000 for 9 months, and C contributed ₦100,000 for 12 months. At the end of the year the business earned a profit of ₦99,000 before interest. The partners agreed that interest on capital at \(5\%\) per annum is to be deducted before sharing the remaining profit in proportion to the capital‑time contributions. Determine the amount of profit each partner receives.

Correct A. A: ₦24,000; B: ₦24,000; C: ₦40,000

B. A: ₦22,909; B: ₦22,909; C: ₦38,182

C. A: ₦35,200; B: ₦23,520; C: ₦29,280

D. A: ₦27,000; B: ₦27,000; C: ₦45,000

Correct Answer: A

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Question 12 View Details

An advertising campaign uses three media: TV, radio and social media. TV reaches \(60\%\) of the target market, radio reaches \(45\%\), and social media reaches \(30\%\). Overlaps are: \(20\%\) watch TV and listen to radio, \(15\%\) watch TV and use social media, \(10\%\) listen to radio and use social media, and \(5\%\) are reached by all three. What percentage of the target market is reached by at least one of the three media, and how many people is that if the target market consists of 250,000 individuals?

A. 90\% and 225,000 people

B. 85\% and 212,500 people

Correct C. 95\% and 237,500 people

D. 100\% and 250,000 people

Correct Answer: C

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Question 13 View Details

The company "AlphaCo" has 7 letters in its name. It encodes messages using a Caesar cipher with a shift equal to the number of letters in the company name. The coded message received is "ZHCL TVULF". Determine the original message.

A. SAGE MONEY

Correct B. SAVE MONEY

C. SAVE MONKEY

D. SAVE MONET

Correct Answer: B

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Question 14 View Details

A retailer faces an annual demand of 12,000 units for a product. The ordering cost is ₦5,000 per order. The unit cost is ₦200 and the holding cost is 2\% of the unit cost per month. The warehouse can hold at most 1,200 units at any time. (a) Compute the Economic Order Quantity (EOQ). (b) If the EOQ exceeds the warehouse capacity, determine the feasible order quantity that minimises the total relevant cost and state that minimum cost.

Correct A. EOQ ≈ 1,581 units; feasible order quantity = 1,200 units; minimum total relevant cost = ₦78,800

B. EOQ ≈ 1,800 units; feasible order quantity = 1,200 units; minimum total relevant cost = ₦79,500

C. EOQ ≈ 1,400 units; feasible order quantity = 1,200 units; minimum total relevant cost = ₦80,500

D. EOQ ≈ 1,581 units; feasible order quantity = 1,000 units; minimum total relevant cost = ₦79,200

Correct Answer: A

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Question 15 View Details

An advertiser wants to achieve at least 300 Gross Rating Points (GRPs) for a campaign. Two media are available: TV with a cost per mille (CPM) of ₦800 and Radio with a CPM of ₦1,200. Each TV spot delivers 2 GRPs and each Radio spot delivers 1.5 GRPs. Due to scheduling limits, no more than 100 TV spots can be purchased. Determine the number of TV and Radio spots that will achieve the target GRPs at the minimum total cost, and state that minimum cost.

Correct A. 100 TV spots and 67 Radio spots; minimum total cost = ₦16,040,000

B. 95 TV spots and 73 Radio spots; minimum total cost = ₦15,560,000

C. 80 TV spots and 100 Radio spots; minimum total cost = ₦15,800,000

D. 100 TV spots and 70 Radio spots; minimum total cost = ₦16,200,000

Correct Answer: A

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Question 16 View Details

A merchant buys goods for ₦45,000. He marks them up by 25% and then gives a discount of 10% on the marked price. What is the overall profit percentage earned by the merchant?

A. 15%

B. 13.5%

C. 10%

Correct D. 12.5%

Correct Answer: D

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Question 17 View Details

An importer wants to bring 2,000 kg of cocoa beans. The world market price is \(2.50\) dollars per kg and shipping plus insurance costs \(0.30\) dollars per kg. Import duty is 15% of the CIF value and a surcharge of 2% is charged on the total after duty. The exchange rate is \(\text{₦}460\) per dollar. What total amount in Naira will the importer have to pay?

A. 2955960

Correct B. 3021648

C. 3021280

D. 2962400

Correct Answer: B

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Question 18 View Details

A retailer sells hand‑made soaps at \(\text{₦}500\) each. Fixed monthly costs are \(\text{₦}120,000\) and the variable cost per soap is \(\text{₦}250\). The retailer wishes to earn a net profit of \(\text{₦}150,000\) after a 10% income tax on profit before tax. How many soaps must be sold in the month to meet this target?

A. 1200

B. 1146

Correct C. 1147

D. 1150

Correct Answer: C

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Question 19 View Details

A loan of \(\text{₦}2,000,000\) is taken at 12% per annum compounded annually for three years. After the first year the interest rate changes to 10% per annum for the remaining two years. What is the total amount payable at the end of the three‑year period?

Correct A. 2710400

B. 2662000

C. 2809856

D. 2759680

Correct Answer: A

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Question 20 View Details

An advertising agency plans a campaign using TV and radio. A TV spot costs \(\text{₦}150,000\) per 30‑second airing and reaches 1,200,000 viewers. A radio spot costs \(\text{₦}30,000\) per 60‑second airing and reaches 300,000 listeners. The target audience is 5,000,000 people and the agency wants to achieve 12,000 GRPs, where one GRP equals 1% of the target audience. At least 20% of the total GRPs must come from TV. Determine the number of TV and radio slots to purchase that meet the GRP target while keeping total cost within a budget of \(\text{₦}70,000,000\).

A. TV slots: 80, Radio slots: 1800

B. TV slots: 90, Radio slots: 1700

C. TV slots: 120, Radio slots: 1500

Correct D. TV slots: 100, Radio slots: 1600

Correct Answer: D

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Question 21 View Details

An entrepreneur needs \(\text{₦5,000,000}\) for a 3‑year project. He can either (i) obtain a bank loan at \(12\%\) per annum payable annually, with interest calculated on the full amount each year and the principal repaid at the end of year\,3; or (ii) issue \(10\%\) debentures with a flotation cost of \(2\%\) of the issue amount, where interest is \(10\%\) per annum payable semi‑annually (i.e., \(5\%\) each half‑year) on the full amount, and the principal is repaid at the end of year\,3. Which source results in the lower total cash outflow over the 3‑year period? Show all calculations.

A. Equity financing

B. Convertible bonds

Correct C. Debentures

D. Bank loan

Correct Answer: C

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Question 22 View Details

A trader wishes to insure goods against fire. The insurer's premium is calculated as \(0.8\%\) of the insured value, plus a loading of \(25\%\) on that premium to cover administrative expenses, and a tax of \(5\%\) on the total premium (including loading). The trader wants the total premium not to exceed \(\text{₦}25,000\). What is the maximum value of goods that can be insured under this condition? Give your answer in naira, rounded down to the nearest naira.

A. 2500000

Correct B. 2380952

C. 3125000

D. 2976190

Correct Answer: B

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Question 23 View Details

A company must store 10,000 units of product. Warehouse A can hold at most 6,000 units, charges a fixed monthly rent of \(\text{₦}150,000\) and a handling charge of \(\text{₦}5\) per unit stored. Warehouse B has unlimited capacity, charges a fixed monthly rent of \(\text{₦}80,000\) and a handling charge of \(\text{₦}8\) per unit stored. Determine how many units should be stored in each warehouse to minimise the total monthly cost, and state the minimum total cost.

A. 6000 units in A, 4000 units in B; minimum cost ₦300000

B. 5000 units in A, 5000 units in B; minimum cost ₦295000

C. 7000 units in A, 3000 units in B; minimum cost ₦289000

Correct D. 6000 units in A, 4000 units in B; minimum cost ₦292000

Correct Answer: D

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Question 24 View Details

A firm needs external finance of \(\text{₦}8,000,000\). It can either (i) issue new shares at \(\text{₦}200\) each, incurring a flotation cost of \(3\%\) of the issue amount, or (ii) retain earnings. The firm's profit before tax is \(\text{₦}2,400,000\) and the tax rate is \(30\%\). If it adopts a dividend‑payout ratio of \(40\%\) of after‑tax profit, what is the maximum amount of finance that can be obtained from retained earnings? Also compute the net proceeds from the share issue and state which source provides the larger amount of finance.

Correct A. Retained earnings: ₦1,008,000; Share issue net proceeds: ₦7,760,000; Share issue is larger

B. Retained earnings: ₦1,008,000; Share issue net proceeds: ₦7,600,000; Share issue is larger

C. Retained earnings: ₦1,008,000; Share issue net proceeds: ₦7,760,000; Retained earnings are larger

D. Retained earnings: ₦960,000; Share issue net proceeds: ₦7,760,000; Share issue is larger

Correct Answer: A

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Question 25 View Details

A consumer bought a television for \(\text{₦}120,000\) on credit but the seller failed to deliver. The consumer cancelled the contract. Under the Consumer Protection Act the seller must refund the purchase price within 30 days; if the refund is delayed, the seller must pay interest at \(18\%\) per annum compounded monthly on the amount due, plus a fixed penalty of \(\text{₦}5,000\). The seller refunded the amount after 75 days. (i) Calculate the total amount the seller must pay to the consumer (principal + interest + penalty). (ii) The consumer also proved a loss of \(\text{₦}10,000\) due to the delay. Is the consumer entitled to claim this additional loss? State the total amount payable if the additional loss is recoverable.

A. Total without additional loss: ₦126,712; Additional loss is recoverable, so total payable could be ₦136,712

B. Total without additional loss: ₦128,712; Additional loss is recoverable, so total payable could be ₦138,712

Correct C. Total without additional loss: ₦127,712; Additional loss is recoverable, so total payable could be ₦137,712

D. Total without additional loss: ₦127,712; Additional loss is not recoverable, so total payable remains ₦127,712

Correct Answer: C

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