waec model questions vol1 2018 commerce | Essay

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Question 1 View Details
Answer the following questions on the introduction to commerce.
Question Parts
(a)
Define commerce and clearly distinguish it from trade.
(b)
Identify three major functions of commerce and explain the importance of each function in the smooth operation of the economy.
(c)
Discuss how commerce contributes to national economic development, giving two specific ways.
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Question 2 View Details
The table below shows Nigeria's export and import values (in million Naira) and the corresponding export and import price indices for the years 2018‑2020. | Year | Export Value (₦ million) | Import Value (₦ million) | Export Price Index (base 2018 = 100) | Import Price Index (base 2018 = 100) | |------|--------------------------|--------------------------|--------------------------------------|--------------------------------------| | 2018 | 1,500 | 2,000 | 100 | 100 | | 2019 | 1,650 | 2,100 | 105 | 108 | | 2020 | 1,800 | 2,250 | 110 | 115 | Answer the following questions based on the data above.
Question Parts
(a)
Calculate the percentage growth in export values for 2019 and for 2020. State which year recorded the higher export growth.
(b)
Determine the average export growth rate for the period 2019‑2020.
(c)
Compute the terms of trade (ToT) index for each year and explain the observed trend.
(d)
Assume a 5 % tariff is imposed on all imports in 2020. Calculate the new import value for 2020 and the resulting trade balance (Export − Import). Discuss briefly one possible macro‑economic effect of this tariff.
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Question 3 View Details
A small retail shop sells a single product. The shop incurs fixed monthly costs of ₦150,000. The variable cost of each unit is ₦250 and the regular selling price per unit is ₦500. The owner is considering offering a 10 % discount on the selling price and also wants to understand how a change in price will affect total revenue given the product’s price elasticity of demand of –1.5.
Question Parts
(a)
Calculate the break‑even quantity (in units) the shop must sell at the regular selling price.
(b)
If a 10 % discount is granted on the selling price, determine the new break‑even quantity and explain the effect of the discount on the shop’s cost‑volume‑profit relationship.
(c)
Given the price elasticity of demand (Eₚ) = –1.5, predict the percentage change in total revenue if the shop raises its regular selling price by 5 %. State whether total revenue will increase or decrease and show the calculation.
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Question 4 View Details
A Nigerian cocoa exporter ships 2,000 tonnes of cocoa to Europe. The FOB price is ₦12,000 per tonne. Shipping and insurance add ₦1,500 per tonne (CIF cost). The current spot exchange rate is ₦410 = €1. The exporter receives payment in euros and converts the amount to naira. The government imposes a 5 % export tax on the FOB value.
Question Parts
(a)
Calculate the total foreign currency (in euros) earned from the export before any tax is deducted.
(b)
Determine the net naira proceeds after converting the euros at the spot rate, adding the shipping/insurance cost, and deducting the export tax.
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Question 5 View Details
A retailer deals in a single product. The cost price of each unit is ₦1,500. The retailer marks the product at a selling price of ₦2,100 and during a promotional period offers a discount of 10% on the marked price. In addition, the retailer incurs a handling cost of ₦200 per unit sold. Fixed operating costs amount to ₦250,000 per month. The retailer sold 2,000 units in the month and the average inventory (valued at cost) was ₦500,000.
Question Parts
(a)
Calculate the markup percentage based on the cost price.
(b)
Determine the net selling price after the 10% discount and state the profit margin percentage (profit per unit expressed as a percentage of the net selling price).
(c)
Using the information above, compute the break‑even quantity of units for the month. (Round up to the nearest whole unit.)
(d)
Calculate the stock‑turnover ratio for the month (Cost of Goods Sold ÷ Average Inventory).
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Question 6 View Details
A wholesaler purchases a product from a manufacturer at ₦1,200 per unit and pays a freight charge of ₦150 per unit. The wholesaler sells the product to retailers at a selling price of ₦1,800 per unit. Fixed overheads amount to ₦120,000 per month and a variable overhead of ₦50 is incurred for each unit handled. Retailers are allowed a 2% cash‑payment discount if they settle their invoices within 30 days.
Question Parts
(a)
Calculate the landed cost per unit for the wholesaler.
(b)
Determine the gross profit margin percentage based on the selling price.
(c)
If a retailer takes the 2% discount, compute the effective profit margin percentage for the wholesaler after the discount.
(d)
Using the data above, find the break‑even quantity of units per month for the wholesaler.
(e)
The wholesaler is considering raising the selling price by 5% but expects a 10% fall in sales volume. Assuming the current monthly sales volume is 4,000 units, decide whether the proposed change will increase or decrease monthly profit and show the calculation.
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Question 7 View Details
ABC Enterprises is planning to formalise its business structure as it expands its operations.
Question Parts
(a)
Compare a partnership and a private limited company in terms of (i) liability of owners, (ii) registration requirements, and (iii) ability to raise capital.
(b)
The owners intend to limit personal risk while still being able to attract external investors. Based on the comparison in part (a), recommend the most appropriate form of business organization and justify your choice.
(c)
If the owners decide to register as a private limited company, the Companies and Allied Matters Act requires a minimum authorized share capital of ₦10,000,000 and that at least 25 % of this be paid up. The registration fee is 0.5 % of the authorized capital. Calculate the minimum paid‑up capital and the total amount that must be paid to the Corporate Affairs Commission at the time of registration.
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Question 8 View Details
XYZ Manufacturing Ltd requires ₦50 million to construct a new production plant. The firm is evaluating three sources of finance: (i) a bank loan, (ii) a 5‑year bond issue, and (iii) retained earnings.
Question Parts
(a)
For the bank loan, the interest rate is 12 % per annum payable annually and the loan is to be repaid in equal annual installments over 5 years. Calculate the amount of each annual installment.
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