neco model questions vol1 2018 commerce | Essay

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Question 1 View Details
Commerce is a vital activity in the Nigerian economy.
Question Parts
(a)
Define commerce and explain its three main functions.
(b)
Distinguish between ‘trade’ and ‘commerce’ and give two examples of each.
(c)
Discuss how the development of e‑commerce can influence the traditional market system in Nigeria.
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Question 2 View Details
A Nigerian exporter of cocoa beans and an importer of wheat flour are analysing the impact of recent changes in world market prices.
Question Parts
(a)
Calculate the terms of trade index for the year 2022 and for the year 2023. (Terms of trade = (export price per tonne ÷ import price per tonne) × 100)
(b)
Determine the percentage change in the terms of trade between 2022 and 2023 and interpret what this change means for the cocoa exporter.
(c)
In 2023 the government imposes a 5 % tariff on wheat‑flour imports. Compute the total tariff revenue collected from the wheat‑flour imports that year.
(d)
Discuss two possible macro‑economic effects of the observed change in the terms of trade and the introduction of the tariff on Nigeria’s balance of payments.
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Question 3 View Details
A retailer purchases a batch of 500 units of a fashion accessory at a total cost of ₦250,000. The retailer intends to apply a markup on the cost price and then offer a discount to customers. The retailer’s target profit after discount is ₦75,000. In addition, market research indicates that the price elasticity of demand for the accessory is –1.5.
Question Parts
(a)
Calculate the unit cost price of the accessory.
(b)
If the retailer marks up the unit cost price by a constant percentage before discount, and then offers a 10 % discount on the marked‑up price, determine the required markup percentage that will enable the retailer to achieve the target profit of ₦75,000.
(c)
Assuming the retailer decides to raise the final selling price (after discount) by 10 % without changing the discount rate, estimate the new quantity demanded using the given price elasticity, and compute the resulting total revenue. State whether the change increases or decreases revenue.
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Question 4 View Details
A Nigerian cocoa exporter receives an order for 20 metric tonnes of cocoa beans from a buyer in the United Kingdom. The contract specifies a price of US$2,500 per tonne, freight charges of US$150 per tonne, and that the buyer will pay in US dollars. The current exchange rate is ₦750 per US$. The Nigerian government imposes a 5 % export duty on the value of the goods (excluding freight) and a 2 % value‑added tax (VAT) on the total customs value (goods + freight).
Question Parts
(a)
Calculate the total invoice amount in US dollars (goods + freight).
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Question 5 View Details
A retailer deals in three product lines – shirts, trousers and shoes. The information for the month of June is shown below. | Product | Selling price per unit (₦) | Cost price per unit (₦) | Units sold | |---------|----------------------------|--------------------------|------------| | Shirts | 5,500 | 4,200 | 200 | | Trousers| 7,800 | 6,300 | 150 | | Shoes | 12,000 | 9,500 | 80 | The retailer incurs fixed overhead costs of ₦150,000 for the month.
Question Parts
(a)
Determine the profit per unit for each product line.
(b)
Calculate the total gross profit earned from each product line and the overall gross profit for the month.
(c)
Using the contribution margin per unit for each product, determine the overall break‑even point in units for the retailer, assuming the sales mix observed in June will continue. Show all steps.
(d)
Identify which product line contributes the greatest amount to covering the fixed costs and suggest one pricing or sales strategy the retailer could adopt to improve overall profitability.
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Question 6 View Details
A wholesaler imports electronic gadgets (model X) and sells them to retailers. The data for the month of July are as follows: - Purchase price from manufacturer: ₦18,000 per unit - Selling price to retailers: ₦22,500 per unit - Discount offered to retailers: 5 % on cash payment within 10 days; otherwise full price payable within 30 days - Transport cost: ₦800 per unit - Fixed overhead costs for the month: ₦120,000 - Units sold in July: 500 units
Question Parts
(a)
Calculate the net profit per unit after accounting for the transport cost.
(b)
If a retailer takes the 5 % cash discount, determine the effective profit per unit for the wholesaler.
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Question 7 View Details
A group of five entrepreneurs intends to start a manufacturing enterprise that will produce household cleaning products.
Question Parts
(a)
Define a partnership, a limited liability company (LLC) and a cooperative, highlighting their key legal characteristics.
(b)
Discuss which of the three forms of business organization is most suitable for the described venture, considering liability, capital mobilisation and management control.
(c)
The entrepreneurs decide on a limited liability company with an authorized share capital of ₦2,000,000 divided into 20,000 shares of ₦100 each. The company proposes to issue an additional 5,000 shares at a premium of ₦20 per share.
() Calculate the total amount raised from the new issue.
() State the new total nominal share capital after the issue.
() Comment on how the issue affects the ownership structure of the company.
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Question 8 View Details
XYZ Ltd. is planning to expand its production capacity by acquiring new machinery costing ₦5,000,000.
Question Parts
(a)
List three internal and three external sources of finance available to XYZ Ltd., and briefly state one advantage of each source.
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