Practice post utme delsu commerce 2018 Past Questions

Question 1

In a warehouse with a capacity of 10,000 units, the storage cost per unit is ₦5 and the holding cost per unit per year is ₦10. If the demand rate is 500 units per year, what is the optimal order quantity?

A. 1,000 units

B. 2,000 units

Correct C. 5,000 units

D. 10,000 units

Correct Answer: C

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Question 2

A company has two warehouses, A and B, with capacities of 5,000 and 3,000 units respectively. The storage cost per unit in warehouse A is ₦5 and in warehouse B is ₦7. If the demand rate is 1,000 units per year, what is the optimal allocation of units between the two warehouses?

A. Warehouse A: 2,000 units, Warehouse B: 3,000 units

Correct B. Warehouse A: 3,000 units, Warehouse B: 2,000 units

C. Warehouse A: 1,500 units, Warehouse B: 2,500 units

D. Warehouse A: 2,500 units, Warehouse B: 1,500 units

Correct Answer: B

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Question 3

A company has a warehouse with a capacity of 10,000 units and a storage cost per unit of ₦5. If the demand rate is 500 units per year and the holding cost per unit per year is ₦10, what is the optimal order quantity using the Economic Order Quantity (EOQ) model?

A. 1,000 units

B. 2,000 units

Correct C. 5,000 units

D. 10,000 units

Correct Answer: C

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Question 4

A company has two warehouses, A and B, with capacities of 5,000 and 3,000 units respectively. The storage cost per unit in warehouse A is ₦5 and in warehouse B is ₦7. If the demand rate is 1,000 units per year, what is the optimal allocation of units between the two warehouses using the Least Cost Method?

A. Warehouse A: 2,000 units, Warehouse B: 3,000 units

Correct B. Warehouse A: 3,000 units, Warehouse B: 2,000 units

C. Warehouse A: 1,500 units, Warehouse B: 2,500 units

D. Warehouse A: 2,500 units, Warehouse B: 1,500 units

Correct Answer: B

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Question 5

A company has a warehouse with a capacity of 10,000 units and a storage cost per unit of ₦5. If the demand rate is 500 units per year and the holding cost per unit per year is ₦10, what is the optimal order quantity using the Wilson Lot Size model?

A. 1,000 units

B. 2,000 units

Correct C. 5,000 units

D. 10,000 units

Correct Answer: C

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Question 6

A company specializes in producing and selling a unique brand of chocolates. The production process involves mixing cocoa beans with sugar, milk, and other ingredients. The company uses a just-in-time inventory system to manage its raw materials. However, due to a sudden increase in demand, the company is facing a shortage of cocoa beans. What is the most appropriate course of action for the company to take?

A. Increase production by hiring more staff and purchasing more equipment

B. Reduce production by decreasing the number of products offered

C. Implement a new inventory management system to better track raw materials

Correct D. Outsource the production of cocoa beans to a third-party supplier

Correct Answer: D

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Question 7

A sole trader, Mr. Johnson, owns and operates a small business selling electrical appliances. He has a warehouse where he stores his inventory. One day, a fire breaks out in the warehouse, causing significant damage to the building and destroying a large portion of his inventory. What type of insurance policy would Mr. Johnson likely have to cover this loss?

A. Public Liability Insurance

B. Business Interruption Insurance

Correct C. Stock Insurance

D. Professional Indemnity Insurance

Correct Answer: C

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Question 8

A company is considering expanding its operations to a new location. The company has identified two potential locations: Location A and Location B. Location A has a larger market size but is farther away from the company's current location. Location B has a smaller market size but is closer to the company's current location. What is the most appropriate decision for the company to make?

A. Choose Location A due to its larger market size

B. Choose Location B due to its proximity to the company's current location

Correct C. Conduct further market research to determine which location is more suitable

D. Choose neither location and explore other options

Correct Answer: C

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Question 9

A company uses a warehouse management system to track its inventory levels. The system uses a first-in, first-out (FIFO) inventory management method. However, due to a sudden increase in demand, the company is facing a shortage of a particular product. What is the most appropriate course of action for the company to take?

A. Increase production by hiring more staff and purchasing more equipment

B. Reduce production by decreasing the number of products offered

C. Implement a new inventory management system to better track raw materials

Correct D. Use a just-in-time inventory system to manage raw materials

Correct Answer: D

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Question 10

A company is considering outsourcing its production to a third-party supplier. The company has identified two potential suppliers: Supplier A and Supplier B. Supplier A has a higher production capacity but is farther away from the company's current location. Supplier B has a lower production capacity but is closer to the company's current location. What is the most appropriate decision for the company to make?

A. Choose Supplier A due to its higher production capacity

B. Choose Supplier B due to its proximity to the company's current location

Correct C. Conduct further research to determine which supplier is more suitable

D. Choose neither supplier and explore other options

Correct Answer: C

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Question 11

In a perfectly competitive market, the law of supply states that as the price of a commodity increases, the quantity supplied will

A. increase

Correct B. decrease

C. remain the same

D. move in the opposite direction

Correct Answer: B

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Question 12

A firm's production function is given by Q = 2L^0.5 + 3K^0.5. If the firm's current input levels are L = 4 and K = 9, what is the marginal product of labor?

Correct A. 1

B. 2

C. 3

D. 4

Correct Answer: A

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Question 13

A company has the following inventory levels: 100 units of product A, 200 units of product B, and 300 units of product C. If the company uses the First-In-First-Out (FIFO) method of inventory valuation, what is the total value of the inventory?

A. ₦150,000

Correct B. ₦200,000

C. ₦250,000

D. ₦300,000

Correct Answer: B

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Question 14

A firm's revenue function is given by R = 2Q^2 + 3Q. If the firm's current output level is Q = 5, what is the marginal revenue?

A. 13

Correct B. 15

C. 17

D. 19

Correct Answer: B

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Question 15

A company has the following transportation costs: 100 for the first 100 units, 50 for the next 200 units, and 25 for the next 300 units. If the company ships 600 units, what is the total transportation cost?

A. ₦15,000

B. ₦20,000

Correct C. ₦25,000

D. ₦30,000

Correct Answer: C

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Question 16

A company's risk management strategy involves diversification of its investments across various sectors. If the company invests ₦100 million in stocks, ₦50 million in bonds, and ₦20 million in real estate, what is the total value of its investment portfolio?

A. ₦170 million

B. ₦180 million

C. ₦190 million

Correct D. ₦200 million

Correct Answer: D

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Question 17

A firm's warehouse is designed to store goods worth ₦500 million. If the firm uses a 10% markup on the cost price to determine the selling price, and the cost price is ₦450 million, what is the total revenue generated from the sale of these goods?

A. ₦495 million

B. ₦500 million

C. ₦505 million

Correct D. ₦510 million

Correct Answer: D

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Question 18

A bank offers a 5-year fixed deposit account with an interest rate of 12% per annum compounded annually. If a customer deposits ₦100,000 at the beginning of the first year, what is the total amount in the account at the end of the fifth year?

A. ₦128,638.62

B. ₦129,638.62

C. ₦130,638.62

Correct D. ₦131,638.62

Correct Answer: D

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Question 19

A consumer protection agency receives a complaint from a customer who purchased a defective product worth ₦50,000. If the agency awards a compensation of ₦75,000, what is the total amount the agency will pay to the customer?

A. ₦125,000

B. ₦125,500

C. ₦126,000

Correct D. ₦126,500

Correct Answer: D

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Question 20

A firm's financial statement shows a net income of ₦200,000 and a total equity of ₦500,000. If the firm has a debt-to-equity ratio of 2:3, what is the total amount of debt the firm has?

A. ₦300,000

B. ₦350,000

C. ₦400,000

Correct D. ₦450,000

Correct Answer: D

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Question 21

In a perfectly competitive market, the law of supply states that as the price of a commodity increases, the quantity supplied will

A. decrease

Correct B. increase

C. remain constant

D. become elastic

Correct Answer: B

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Question 22

A sole trader is a type of business ownership where one person owns and operates the business. What is the main advantage of being a sole trader?

A. Limited liability

B. Unlimited liability

C. Easy to set up

Correct D. Flexibility in decision-making

Correct Answer: D

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Question 23

A company is a type of business ownership where there are multiple owners who share the profits and losses. What is the main disadvantage of being a company?

A. Limited liability

B. Unlimited liability

Correct C. Complexity in decision-making

D. Higher tax rates

Correct Answer: C

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Question 24

A warehouse is a facility used for storing goods and materials. What is the main purpose of a warehouse?

A. To manufacture goods

B. To sell goods

Correct C. To store goods

D. To transport goods

Correct Answer: C

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Question 25

A production function is a mathematical representation of the relationship between inputs and outputs in a production process. What is the main purpose of a production function?

A. To determine the optimal input mix

B. To calculate the total product

C. To measure the marginal product

Correct D. To evaluate the efficiency of production

Correct Answer: D

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POST UTME DELSU 2018 Commerce | Objective

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