Neco Model Questions Vol1 2025 Commerce Question 48

Practice objective / multiple choice question 48 from the 2025 Neco Model Questions Vol1 Commerce examination.

Neco Model Questions Vol1 2025 Commerce Objective / Multiple Choice Medium Difficulty
Question 48 NECO_MODEL_QUESTIONS_VOL1 • 2025 • COMMERCE • objective

A logistics company transports goods by truck. Fixed cost per trip is ₦45,000 and variable cost is ₦120 per ton‑km. The truck can carry a maximum of 20 tons. The company charges a freight rate of ₦250 per ton‑km. For a trip of 350 km, the company may either (i) run a direct trip, or (ii) use a depot, splitting the journey into two legs of 200 km and 180 km. Using the depot reduces the variable cost to ₦100 per ton‑km but adds a handling charge of ₦10,000 per leg. If the load is 15 tons, which option yields the higher profit and what is that profit (in naira)?

Answer Options

A. Depot trip, profit ₦600,000
Correct Answer B. Direct trip, profit ₦637,500
C. Direct trip, profit ₦620,000
D. Depot trip, profit ₦650,000
Correct Answer
B
Correct Option:
Direct trip, profit ₦637,500

About This Question

This is Neco Model Questions Vol1 2025 Commerce Question 48. It is one of the objective questions from the 2025 Neco Model Questions Vol1 Commerce examination.

Difficulty level: Medium .

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