Practice waec model questions vol1 commerce 2017 Past Questions

Question 1 View Details

A retailer has an annual demand of 12,000 units for a product. The ordering cost is ₦500 per order and the holding cost is 10% of the unit cost. The unit cost is ₦200. Lead time is 5 days and daily demand during lead time is uncertain with an average of 30 units and a standard deviation of 5 units. For a 95% service level (z = 1.65), determine (a) the Economic Order Quantity (EOQ) and (b) the reorder point (including safety stock). Also state the total annual cost (ordering + holding) based on the EOQ and safety stock.

Correct A. EOQ ≈ 775 units; Reorder point = 169 units; Total annual cost ≈ ₦15,870

B. EOQ ≈ 720 units; Reorder point = 170 units; Total annual cost ≈ ₦15,300

C. EOQ ≈ 800 units; Reorder point = 165 units; Total annual cost ≈ ₦16,200

D. EOQ ≈ 750 units; Reorder point = 175 units; Total annual cost ≈ ₦15,500

Correct Answer: A

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Question 2 View Details

Three partners A, B and C start a partnership. Their capital contributions are ₦120,000, ₦80,000 and ₦100,000 respectively. Partner A works 40 hours per week, B works 20 hours per week and C works 10 hours per week. The profit for the year is to be shared 50% on the basis of capital contribution and 50% on the basis of time contributed. If the partnership earned a profit of ₦96,000, how much profit does each partner receive?

A. A: ₦48,000; B: ₦25,000; C: ₦23,000

B. A: ₦45,000; B: ₦27,000; C: ₦24,000

Correct C. A: ₦46,629; B: ₦26,514; C: ₦22,857

D. A: ₦44,500; B: ₦28,500; C: ₦23,000

Correct Answer: C

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Question 3 View Details

A trader purchases rice at ₦2,500 per kilogram. He intends to earn a profit of 20% on his cost. What selling price per kilogram should he set?

Correct A. ₦3,000

B. ₦2,500

C. ₦3,500

D. ₦2,750

Correct Answer: A

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Question 4 View Details

A home baker sells 120 cupcakes at ₦500 each. The cost of ingredients is ₦12,000, electricity costs ₦3,000 and packaging costs ₦2,400. What is the baker's net profit?

Correct A. ₦42,600

B. ₦39,600

C. ₦42,000

D. ₦45,000

Correct Answer: A

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Question 5 View Details

An importer wants to bring 5,000 kg of cocoa beans into Nigeria. The world price is $2.20 per kilogram. The exchange rate is ₦460 per US$. Import duty is 5% of the customs value, freight charges are ₦150 per kilogram, and a handling surcharge of 2% is applied on the sum of customs value, duty and freight. Calculate the total amount in naira that the importer must pay.

A. ₦6,066,450

B. ₦6,164,200

C. ₦6,222,510

Correct D. ₦6,184,260

Correct Answer: D

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Question 6 View Details

A transport company uses a truck that consumes fuel at 8 L per 100 km when empty and 10 L per 100 km when loaded. The truck carries a 5‑tonne load for a one‑way distance of 300 km. Fuel costs ₦165 per litre. The driver is paid ₦12,000 per day and the trip takes 2 days (including loading and unloading). The truck was purchased for ₦2,500,000 and its depreciation is charged at 5 % of the purchase price for every 1,000 km travelled. Calculate the total cost of the trip (fuel + driver's wage + depreciation).

A. ₦70,000

B. ₦68,250

Correct C. ₦66,450

D. ₦65,450

Correct Answer: C

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Question 7 View Details

A customer deposits ₦500,000 in a bank that pays a nominal rate of 12 % per annum compounded quarterly. After six months the bank changes the nominal rate to 10 % per annum compounded monthly for the remaining 1.5 years. What is the amount in the account at the end of the 2‑year period? (Round to the nearest naira.)

A. ₦605,200

Correct B. ₦615,913

C. ₦610,000

D. ₦620,500

Correct Answer: B

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Question 8 View Details

A company wants to run an advertising campaign that must achieve at least 2,000,000 total impressions. The target market consists of 250,000 people, so the average frequency must be at least 3 impressions per person. At least 40 % and at most 70 % of the total impressions must be on TV. The cost of TV advertising is ₦150 per 1,000 impressions (CPM) and the cost of radio advertising is ₦80 per 1,000 impressions. Determine the minimum total advertising budget required and state how much should be spent on TV and on radio respectively.

A. Total budget ₦216,000; TV ₦108,000; Radio ₦108,000

Correct B. Total budget ₦216,000; TV ₦120,000; Radio ₦96,000

C. Total budget ₦225,000; TV ₦135,000; Radio ₦90,000

D. Total budget ₦210,000; TV ₦120,000; Radio ₦90,000

Correct Answer: B

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Question 9 View Details

A firm needs ₦10,000,000 to purchase a new machine. It can raise the money from three sources: retained earnings (cost 12 % p.a.), a bank loan (cost 15 % p.a. plus a 2 % arrangement fee on the amount borrowed) and 10‑year bonds (cost 10 % p.a. plus a 3 % flotation cost on the issue amount). At least 30 % of the total funds must come from retained earnings and the bank loan cannot exceed ₦4,000,000. Determine the optimal mix of the three sources that minimises the annual financing cost (ignore one‑time fees for this part) and compute the total one‑time fees payable for the chosen mix.

A. Retained earnings ₦3,000,000; Bonds ₦3,000,000; Bank loan ₦4,000,000. Annual cost ₦1,260,000. One‑time fees ₦170,000.

B. Retained earnings ₦3,000,000; Bonds ₦5,000,000; Bank loan ₦2,000,000. Annual cost ₦1,160,000. One‑time fees ₦190,000.

C. Retained earnings ₦4,000,000; Bonds ₦6,000,000; Bank loan ₦0. Annual cost ₦1,080,000. One‑time fees ₦180,000.

Correct D. Retained earnings ₦3,000,000; Bonds ₦7,000,000; Bank loan ₦0. Annual cost ₦1,060,000. One‑time fees ₦210,000.

Correct Answer: D

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Question 10 View Details

A partnership of three persons A, B and C runs a trading business with total assets of ₦5,000,000 and total liabilities of ₦3,200,000. Their profit‑sharing ratio is 2 : 1 : 1 respectively. They decide to incorporate as a private limited company with a share capital of ₦2,000,000 divided into shares of ₦100 each. The partners subscribe to shares in the same ratio as their profit‑sharing. After incorporation the company takes a loan of ₦1,500,000 at 10 % interest per annum. Assuming the company assumes all existing liabilities, determine (a) the number of shares each former partner holds, (b) the amount of capital each contributes, and (c) the maximum personal liability each partner faces for the company's liabilities after incorporation.

A. A: 8,000 shares (₦800,000); B: 6,000 shares (₦600,000); C: 6,000 shares (₦600,000). Personal liability = ₦0 for each partner.

B. A: 10,000 shares (₦1,000,000); B: 5,000 shares (₦500,000); C: 5,000 shares (₦500,000). Personal liability = ₦200,000 for each partner.

Correct C. A: 10,000 shares (₦1,000,000); B: 5,000 shares (₦500,000); C: 5,000 shares (₦500,000). Personal liability = ₦0 for each partner.

D. A: 10,000 shares (₦800,000); B: 5,000 shares (₦400,000); C: 5,000 shares (₦400,000). Personal liability = ₦0 for each partner.

Correct Answer: C

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Question 11 View Details

A wholesaler purchases goods whose list price is ₦500,000. He receives a trade discount of 12% on the list price and, if he pays within 10 days, a cash discount of 3% on the discounted price. He also pays a commission of 2% on the price after the cash discount to his sales agent. He intends to sell the goods at a markup of 25% on his total cost (price after discounts plus commission). What selling price should he set for the goods?

A. 533500

Correct B. 544170

C. 542036

D. 546000

Correct Answer: B

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Question 12 View Details

An importer is issued a documentary Letter of Credit for €200,000, payable at sight. The LC requires the exporter to ship two consignments: the first 60% of the goods within 30 days and the remaining 40% within 60 days. The exchange rate at the time of the first shipment is €1 = ₦480, and at the time of the second shipment it is €1 = ₦495. The bank charges a handling fee of 0.5% of the amount drawn for each shipment. What total amount in Naira must the importer pay for both shipments combined?

A. 102060000

B. 97200000

C. 96480000

Correct D. 97686000

Correct Answer: D

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Question 13 View Details

A Nigerian importer wishes to bring electronic goods valued at $150,000 FOB. The goods incur a basic customs duty of 20% on the CIF value (CIF = FOB + freight + insurance). Freight is $12,000 and insurance is $3,000. After the basic duty, an excise duty of 5% is applied on the sum of the FOB value and the basic duty. The importer qualifies for a tariff rebate of 10% on the total duty (basic + excise). What is the total duty, in dollars, that the importer must pay after the rebate?

A. 36150

Correct B. 37935

C. 42150

D. 38835

Correct Answer: B

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Question 14 View Details

A consumer buys a washing machine for ₦120,000 on a 12‑month hire‑purchase plan that charges simple interest of 12% per annum on the cash price. After 4 months the machine is found defective and is returned. The seller's policy deducts a restocking fee of 8% of the cash price and the consumer is entitled to a refund of all payments made, plus simple interest on the cash price for the 4‑month period at the same 12% per annum rate. How much total refund should the consumer receive?

A. 35200

Correct B. 40000

C. 49600

D. 45600

Correct Answer: B

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Question 15 View Details

A company plans a promotional campaign consisting of three activities: (i) printing flyers at a rate of ₦150 per 100 flyers, (ii) radio advertising for 30‑second slots at ₦2,500 per slot, and (iii) social‑media ads costing ₦0.75 per click. The campaign aims to reach 12,000 potential customers with flyers, obtain a total radio airtime of 6 minutes, and expects a click‑through rate of 2% from an online audience of 250,000 people. A fixed administrative overhead equal to 5% of the total variable cost is added. What is the total budget, in Naira, for the campaign?

A. 38587.5

B. 50793.75

C. 51750

Correct D. 54337.5

Correct Answer: D

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Question 16 View Details

A trader bought 200 shares of Company A at $\₦150$ per share and 150 shares of Company B at $\₦240$ per share. After six months Company A announced a 3‑for‑1 stock split and paid a dividend of $\₦5$ per share (post‑split). At the same time Company B's share price fell to $\₦210$ and the trader sold 80 of its shares. After another three months the market price of Company A is $\₦55$ per share and Company B is $\₦225$ per share; the trader sells all remaining shares. What is the overall percentage profit or loss on the whole investment, including the dividend received?

Correct A. 21.6% loss

B. 18.4% loss

C. 5.2% gain

D. 24.3% loss

Correct Answer: A

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Question 17 View Details

A firm plans an advertising campaign using TV and radio. One TV GRP costs $\₦120,000$ and one radio GRP costs $\₦45,000$. The campaign must achieve at least 250 combined GRPs, TV GRPs must be at least twice the radio GRPs, and the total budget cannot exceed $\₦60,000,000$. Assuming reach is directly proportional to the total GRPs, determine the number of TV GRPs and radio GRPs that satisfy all constraints while maximising total reach.

A. TV GRPs = 360, Radio GRPs = 180

B. TV GRPs = 300, Radio GRPs = 150

Correct C. TV GRPs = 420, Radio GRPs = 210

D. TV GRPs = 480, Radio GRPs = 240

Correct Answer: C

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Question 18 View Details

Country X exports 5 tons of cocoa and imports 2 tons of rice. The world price of cocoa is $\₦800$ per kilogram and the price of rice is $\₦400$ per kilogram. What is the terms of trade for Country X, expressed as a percentage?

Correct A. 500%

B. 400%

C. 250%

D. 600%

Correct Answer: A

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Question 19 View Details

A new mobile‑payment service follows the logistic adoption model $P(t)=\frac{K}{1+e^{-a(t-t_0)}}$ where $K=1,200,000$ potential users, $a=0.4$ per month and $t_0=6$ months. After three months a promotional campaign raises the growth rate by 25% for the next four months (i.e., $a$ becomes 0.5 during months 4‑7). After month 7 the growth rate returns to the original $a=0.4$. If the service is launched at month 0, how many users are expected at the end of month 12? (Round to the nearest whole number.)

A. 1,200,000

B. 1,050,000

C. 950,000

Correct D. 1,091,000

Correct Answer: D

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Question 20 View Details

A retailer raises the price of a product from $\₦2,000$ to $\₦2,200$. As a result, the quantity sold per month falls from 150 units to 120 units. What is the percentage change in the retailer's monthly revenue?

A. -14%

Correct B. -12%

C. -8%

D. -10%

Correct Answer: B

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Question 21 View Details

A home‑based baker sells each cake at a marked price of ₦5,000. She offers a discount schedule: 5% discount for orders of 5-9 cakes, 8% discount for 10-14 cakes, and 12% discount for 15 or more cakes. After the discount, a sales tax of 5% is added to the selling price. The cost of producing each cake is ₦4,200 for orders up to 9 cakes, ₦4,000 for orders of 10-14 cakes, and ₦3,800 for orders of 15 or more cakes. She wants a profit margin of at least 20% on each cake sold (profit margin = profit ÷ cost × 100%). What is the smallest order size that meets this profit‑margin requirement?

Correct A. 10

B. 5

C. 12

D. 15

Correct Answer: A

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Question 22 View Details

A retailer purchases 200 units of a gadget at ₦1,200 each. Fixed overhead for the month is ₦30,000 and a variable overhead of ₦50 is incurred for each unit sold. He intends to earn a profit equal to 25% of the total cost (purchase cost plus both overheads) after selling all units. For sales beyond 150 units he will give a promotional discount of 10% on the regular selling price. What regular selling price per unit (before any discount) must he set to meet his profit target?

A. 1900.00

B. 1750.00

Correct C. 1794.87

D. 1820.55

Correct Answer: C

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Question 23 View Details

A company receives an invoice for office supplies listed as follows: - Item A: 40 units @ ₦2,500 each - Item B: 25 units @ ₦3,600 each - Item C: 15 units @ ₦4,800 each The supplier offers a 5% trade discount on the total of items A and B, followed by an additional 3% discount on the subtotal after the first discount. After all discounts, a fixed tax of ₦15,000 is added. A cash discount of 2% on the amount after discounts (but before tax) is allowed if payment is made within 10 days. The company pays within the discount period. However, the accountant mistakenly applied the cash discount after adding the tax. By how much (in naira) does the accountant's payment differ from the correct amount due?

A. 350

Correct B. 300

C. 400

D. 250

Correct Answer: B

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Question 24 View Details

A motor insurance policy has a basic premium of ₦45,000. The insurer adds a loading of 12% for a high‑risk area and a 5% administrative charge on the premium after loading. A government tax of 2.5% is then applied on the amount after the administrative charge. The policyholder is eligible for a no‑claim bonus of 10% on the basic premium (calculated before loading). What is the final amount the policyholder must pay (rounded to the nearest naira)?

A. 49200

B. 48500

C. 48000

Correct D. 48819

Correct Answer: D

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Question 25 View Details

Country X exported goods worth $120 million and imported goods worth $90 million during the year. What is Country X's trade balance?

A. 210

B. 120

Correct C. 30

D. -30

Correct Answer: C

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