Neco 2024 Commerce Question 5

Practice essay / theory question 5 from the 2024 Neco Commerce examination. This question covers Retail Trade, Markup and Pricing, Profit Calculation, Business Decision‑Making .

Neco 2024 Commerce Essay / Theory
Topics: Retail Trade Markup and Pricing Profit Calculation Business Decision‑Making
Question 5 NECO • 2024 • COMMERCE • essay

A retail store sells a particular brand of mobile phone. The store purchases each unit at a cost price of ₦45,000. The store applies a markup policy that depends on the monthly sales volume: if the store sells up to 20 units in a month, a markup of 30% on cost is applied; for sales between 21 and 40 units, a markup of 25% is applied; for sales above 40 units, a markup of 20% is applied. In a particular month the store sold 38 units.

Question Parts

( a )
Determine the selling price per unit applied for that month.
( b )
Compute the total revenue, total cost, and gross profit for the month.
( c )
The store is considering a promotional discount of 5% on the selling price for all units sold in the next month, while expecting sales to increase to 45 units. Assuming the same markup policy applies to the unchanged cost price, evaluate whether the promotion will increase the gross profit compared to the current month. Show all calculations and state your conclusion.
( d )
Discuss two non‑price factors the retailer could use to sustain sales growth without relying on discounts, linking each factor to its likely impact on profitability.

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About This Question

This is Neco 2024 Commerce Question 5. It is one of the essay questions from the 2024 Neco Commerce examination.

The question covers Retail Trade, Markup and Pricing, Profit Calculation, Business Decision‑Making .

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