A home‑based trader purchases 200 units of a product at ₦250 each. Monthly fixed costs (rent, utilities, etc.) amount to ₦10,000. She sells each unit with a 40 % markup on cost, but offers a 5 % cash discount to customers who pay within 10 days. Assume all customers take the discount and all 200 units are sold each month.

(a) Calculate the monthly profit after accounting for the discount and fixed costs.
(b) How many units must she sell in a month to achieve a profit of ₦50,000 under the same terms?

Question

A home‑based trader purchases 200 units of a product at ₦250 each. Monthly fixed costs (rent, utilities, etc.) amount to ₦10,000. She sells each unit with a 40 % markup on cost, but offers a 5 % cash discount to customers who pay within 10 days. Assume all customers take the discount and all 200 units are sold each month.

(a) Calculate the monthly profit after accounting for the discount and fixed costs.
(b) How many units must she sell in a month to achieve a profit of ₦50,000 under the same terms?

Accepted Answer

Monthly profit = ₦6,500; units needed for ₦50,000 profit = 728

Waec Model Questions Vol1 2023 Commerce Question 38

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