Neco Model Questions Vol1 2020 Commerce Question 5

Practice essay / theory question 5 from the 2020 Neco Model Questions Vol1 Commerce examination. This question covers Retail Trade .

Neco Model Questions Vol1 2020 Commerce Essay / Theory
Topic: Retail Trade
Question 5 NECO_MODEL_QUESTIONS_VOL1 • 2020 • COMMERCE • essay

A retailer deals in electronic gadgets. The retailer purchases each unit of a particular gadget at a cost price of ₦2,500. The retailer applies a markup of 30% on the cost price to determine the selling price. The retailer also offers a 10% discount on the selling price to customers during a promotional period. The retailer's fixed monthly overhead costs amount to ₦150,000.

Question Parts

( a )
Calculate the selling price per unit before any discount.
( b )
If a 10% discount is granted on the selling price, determine the net selling price per unit and the profit earned on each unit sold at the discounted price.
( c )
Using the profit per unit from part (b), calculate the minimum number of units the retailer must sell in a month to cover the fixed overhead costs (i.e., the break‑even point).
( d )
Assume the cost price per unit rises by 5% while the retailer keeps the same markup and discount rates. Discuss qualitatively how this change affects (i) the profit per unit, (ii) the break‑even point, and (iii) the retailer’s overall profitability.

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About This Question

This is Neco Model Questions Vol1 2020 Commerce Question 5. It is one of the essay questions from the 2020 Neco Model Questions Vol1 Commerce examination.

The question covers Retail Trade .

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