Neco 2025 Commerce Question 3

Practice essay / theory question 3 from the 2025 Neco Commerce examination. This question covers Home Trade .

Neco 2025 Commerce Essay / Theory

Topic: Home Trade

Question 3 NECO • 2025 • COMMERCE • essay

A home‑based textile business produces hand‑embroidered shirts. The following cost information is given for each shirt: - Raw material cost: ₦1,200 - Direct labour cost: ₦800 - Fixed overhead for the quarter: ₦100,000 (allocated to the business as a whole) The owner wishes to earn a profit margin of 30 % on the total cost per shirt and expects to sell 400 shirts in the first quarter. Answer the following questions:

Question Parts

( a )

Determine the unit selling price (in Naira) before any discount is offered.

( b )

To stimulate sales, a discount of 5 % on the selling price is offered for orders of 100 shirts or more. If the business actually sells 120 shirts at the discounted price and the remaining 280 shirts at the full price, calculate the total profit earned in the quarter.

( c )

During the next quarter the price of raw material rises by 10 % while all other costs remain unchanged. Keeping the original selling price unchanged, determine the new break‑even quantity (the minimum number of shirts that must be sold to cover total cost).

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About This Question

This is Neco 2025 Commerce Question 3. It is one of the essay questions from the 2025 Neco Commerce examination.

The question covers Home Trade .

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