A wholesaler sells three products A, B and C. The costs per unit are $\₦4{,}000$, $\₦6{,}000$ and $\₦5{,}000$ respectively. He intends the following mark‑ups before any discount: 30 % on A, 20 % on B and 25 % on C. He expects to sell 100 units of A, 80 units of B and 120 units of C. He wishes to achieve an overall profit margin of exactly 25 % on total sales revenue.

(i) Can a single uniform discount (the same percentage applied to the three selling prices) achieve this target?\n(ii) If not, what percentage change (negative indicates a discount) must be applied to product C's price - while keeping A and B at their intended mark‑up prices - to reach the 25 % overall margin? Provide the percentage (to two decimal places).

Question

A wholesaler sells three products A, B and C. The costs per unit are $\₦4{,}000$, $\₦6{,}000$ and $\₦5{,}000$ respectively. He intends the following mark‑ups before any discount: 30 % on A, 20 % on B and 25 % on C. He expects to sell 100 units of A, 80 units of B and 120 units of C. He wishes to achieve an overall profit margin of exactly 25 % on total sales revenue.

(i) Can a single uniform discount (the same percentage applied to the three selling prices) achieve this target?\n(ii) If not, what percentage change (negative indicates a discount) must be applied to product C's price - while keeping A and B at their intended mark‑up prices - to reach the 25 % overall margin? Provide the percentage (to two decimal places).

Accepted Answer

Uniform discount not possible; product C needs a price increase of 16.98 % (i.e., discount = ‑16.98 %).

Neco Model Questions Vol1 2017 Commerce Question 30

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