A wholesaler purchases goods at ₦50 per unit. He sells to retailers with the following discount schedule based on order quantity $Q$:

- $0500$: 10\% discount on unit price

Monthly fixed costs are ₦30,000.

i) What is the smallest order quantity that will give the wholesaler a monthly profit of at least ₦20,000?

ii) What profit (or loss) results from an order of 620 units?

Question

A wholesaler purchases goods at ₦50 per unit. He sells to retailers with the following discount schedule based on order quantity $Q$:

- $0500$: 10\% discount on unit price

Monthly fixed costs are ₦30,000.

i) What is the smallest order quantity that will give the wholesaler a monthly profit of at least ₦20,000?

ii) What profit (or loss) results from an order of 620 units?

Accepted Answer

Minimum order = 2,273 units; profit on 620‑unit order = -₦16,360 (loss)

Neco 2024 Commerce Question 19