waec model questions vol1 2022 commerce | Essay

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Question 1 View Details
Commerce is the engine of a nation's economy. Answer the following questions in the context of Nigeria.
Question Parts
(a)
Define commerce and state why it is considered a vital activity in any economy.
(b)
List and briefly explain any three major functions of commerce.
(c)
Discuss how commerce contributes to the economic development of Nigeria.
(d)
Evaluate two advantages and two disadvantages of e‑commerce for small retailers in Nigeria.
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Question 2 View Details
A trader in Lagos imports 500 kg of cocoa beans at ₦150 per kilogram. Freight charges amount to ₦10 000, insurance costs ₦5 000 and the beans are sold at ₦200 per kilogram. The trader gives a 5 % discount on the total sales invoice to a wholesaler and incurs selling expenses of ₦8 000.
Question Parts
(a)
Calculate the trader’s gross profit before discount and selling expenses.
(b)
After giving the 5 % discount and deducting the selling expenses, determine the net profit and the profit‑margin percentage (net profit ÷ net sales × 100).
(c)
Explain how fluctuations in world cocoa prices could affect the trader’s business.
(d)
Suggest two practical strategies the trader can adopt to mitigate the risk arising from price volatility.
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Question 3 View Details
A young entrepreneur runs a home‑based business selling handcrafted wooden toys. The business incurs fixed monthly costs of ₦120,000 (rent, electricity, etc.). The variable cost of producing each toy is ₦2,500. The regular selling price per toy is ₦5,000 and the entrepreneur currently sells 120 toys each month.
Question Parts
(a)
Determine the break‑even quantity of toys per month at the regular selling price.
(b)
The entrepreneur offers a 10 % discount on the selling price for bulk orders of 50 toys or more. Calculate the new break‑even quantity for such bulk orders.
(c)
The entrepreneur is considering raising the regular selling price by 15 % but expects the monthly sales volume to fall by 20 %. Using the original fixed and variable costs, determine whether the expected profit will increase or decrease compared with the current profit at 120 toys per month. State the percentage change in profit.
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Question 4 View Details
A Nigerian firm imports cocoa beans from Ghana and exports processed cocoa powder to Europe. The following data apply:\n\n- Purchase price of cocoa beans: 1,200 Ghana cedis (GHS) per tonne.\n- Exchange rate: 1 GHS = ₦45.\n- Freight and insurance on import (CIF): ₦30,000 per tonne.\n- Import tariff: 5 % ad valorem on the CIF value.\n- Domestic processing cost: ₦15,000 per tonne of beans.\n- Processing loss: 1 tonne of beans yields 0.8 tonne of cocoa powder.\n- Export price of cocoa powder: €1,800 per tonne (FOB).\n- Exchange rate: €1 = ₦560.\n- Export freight: ₦40,000 per tonne of powder.\n- Export duty: 2 % of the FOB value.
Question Parts
(a)
Calculate the total landed cost in Naira of one tonne of cocoa beans imported from Ghana (include purchase price, freight, insurance and import tariff).
(b)
Determine the total cost in Naira of producing one tonne of cocoa powder, taking into account the processing loss, processing cost, export freight and export duty.
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Question 5 View Details
A retailer purchases a popular model of mobile phone from a wholesaler at a cost of ₦30,000 per unit. The retailer incurs fixed monthly costs of ₦450,000 (rent, salaries, etc.) and variable selling expenses of ₦2,000 per unit sold (advertising, utilities). The usual selling price is ₦45,000 per phone. The retailer offers a 5 % discount on the selling price to any customer who buys 20 units or more in a single purchase. The retailer expects to sell 150 units in a month.
Question Parts
(a)
Determine the break‑even quantity for the retailer (the smallest whole number of phones that must be sold in a month for total revenue to equal total cost).
(b)
If the retailer sells the expected 150 units in the month and the 5 % bulk discount is applied to all units, calculate the profit for the month.
(c)
The retailer is considering increasing the bulk discount to 7 %. Assuming the same sales volume of 150 units, determine the new profit and state the change in profit compared with the 5 % discount scenario.
(d)
Based on the calculations above, recommend a pricing strategy for the retailer that balances sales volume and profitability. Justify your recommendation in two to three sentences.
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Question 6 View Details
A wholesale dealer buys a generic electronic component from a manufacturer at ₦20,000 per unit. The dealer incurs a flat shipping charge of ₦30,000 for each order placed and a storage cost of ₦150 per unit per month. The annual demand for the component is 12,000 units (approximately 1,000 units each month). The dealer’s ordering cost is therefore ₦30,000 per order. The holding cost is calculated as 20 % of the unit purchase price per year. The dealer also offers a 2 % cash discount to retailers who settle their invoices within 10 days; otherwise payment is due in 30 days.
Question Parts
(a)
Calculate the total cost per unit for a batch of 1,000 units, including purchase price, shipping, and storage for one month.
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Question 7 View Details
A group of three graduates plans to start a technology‑consulting firm that will provide IT solutions to corporate clients. They intend to raise capital from private investors, limit their personal liability, and eventually expand operations across Nigeria.
Question Parts
(a)
Identify the most suitable form of business organization for the start‑up and give one reason for your choice.
(b)
Outline the legal steps required to register the chosen form of organization in Nigeria.
(c)
Discuss two advantages and two disadvantages of the chosen form when compared with a sole proprietorship.
(d)
In its first year the business records a loss of ₦500,000. Explain how this loss would be treated for tax purposes under the chosen form of organization.
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Question 8 View Details
XYZ Manufacturing Ltd. produces plastic packaging and intends to expand its production capacity to meet rising demand. The expansion will require an additional ₦20 million in financing.
Question Parts
(a)
Identify three internal and three external sources of finance that are appropriate for XYZ Manufacturing Ltd.
(b)
The firm can obtain a bank loan at 12 % per annum, issue 10 % debentures, and raise equity at an expected return of 15 %. It wishes to raise the ₦20 million with a target capital structure of 40 % debt (bank loan + debentures) and 60 % equity. Calculate the amount to be raised from each source and the overall weighted average cost of capital (WACC).
(c)
Discuss two non‑financial factors that XYZ Manufacturing Ltd. should consider when choosing between the bank loan and the debentures.
(d)
If the firm anticipates a cash‑flow shortfall of ₦2 million in the first year after expansion, explain how this would affect its ability to meet debt obligations and suggest one mitigation strategy.
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