Neco Model Questions Vol1 2022 Commerce Question 3

Practice essay / theory question 3 from the 2022 Neco Model Questions Vol1 Commerce examination. This question covers Home Trade, Costing, Pricing, Profitability, Inventory Management .

Neco Model Questions Vol1 2022 Commerce Essay / Theory
Topics: Home Trade Costing Pricing Profitability Inventory Management
Question 3 NECO_MODEL_QUESTIONS_VOL1 • 2022 • COMMERCE • essay

A small retailer in Lagos deals in electronic accessories. He purchases 500 units of a particular accessory at a unit cost of ₦2,200. He sells the stock in three price tiers as described below:

Question Parts

( a )
Calculate the total cost of the purchase.
( b )
He sells 200 units at ₦3,000 each, 150 units at ₦2,800 each and the remaining units at ₦2,600 each. Compute the total revenue earned from the sale of all 500 units.
( c )
Determine the profit earned from the whole transaction.
( d )
The retailer wishes to achieve a profit margin of 25 % on the total cost. Assuming the first two price tiers remain unchanged, what average selling price must be charged for the remaining 150 units to meet this target?
( e )
During the period the retailer kept an average inventory of 250 units. Calculate the inventory turnover ratio (in terms of units) and comment on what the figure indicates about his stock management.

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About This Question

This is Neco Model Questions Vol1 2022 Commerce Question 3. It is one of the essay questions from the 2022 Neco Model Questions Vol1 Commerce examination.

The question covers Home Trade, Costing, Pricing, Profitability, Inventory Management .

View More Neco Model Questions Vol1 2022 Commerce Questions More Neco Model Questions Vol1 Practice Questions Back to Questions

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