waec model questions vol1 2024 commerce | Essay

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Question 1 View Details
A small town market in Nigeria consists of cocoa farmers, a wholesale trader, a retail shop, and consumers. Transactions in the market are frequently carried out using mobile money services.
Question Parts
(a)
Identify and briefly describe the four main agents of commerce present in the scenario.
(b)
Explain two functions of commerce that are illustrated by the use of mobile money in the market.
(c)
Evaluate the advantages and disadvantages of electronic commerce (e‑commerce) over traditional face‑to‑face commerce for small‑scale traders in Nigeria.
() State at least three advantages.
() State at least two disadvantages.
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Question 2 View Details
In 2023, Nigeria exported 2.5 million tonnes of cocoa at an average world price of ₦1,500 per kilogram. The same year the country imported 1.2 million tonnes of wheat at an average price of ₦2,500 per kilogram. The government subsequently imposed a 10 % tariff on wheat imports.
Question Parts
(a)
Calculate the total export revenue from cocoa and the total import cost for wheat before the tariff. State the trade balance (export revenue minus import cost).
(b)
Determine the terms of trade (ToT) before the tariff, expressed as a percentage, using the formula ToT = (Export Price Index / Import Price Index) × 100, where the price indices are the given average prices.
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Question 3 View Details
Ada started a home‑based retail shop that sells handcrafted wooden toys. Her fixed monthly costs are ₦120,000, the variable cost per toy is ₦2,500 and the regular selling price per toy is ₦4,500.
Question Parts
(a)
Determine the break‑even quantity of toys per month.
(b)
After three months Ada offers a 10 % discount on the selling price to boost sales. Assuming the variable cost per toy remains unchanged, calculate the new break‑even quantity.
(c)
Discuss two advantages and two disadvantages of using a discount strategy in a small home‑based business, linking your discussion to the results obtained in parts (a) and (b).
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Question 4 View Details
TrendWear Ltd. plans to import 5,000 m of high‑quality cotton fabric from Bangladesh. The FOB price is US$3.20 per metre, the exchange rate is ₦460 per US$, sea freight is US$0.45 per metre, import duty is 5 % of the CIF value, and a surcharge of 2 % is levied on the duty amount. The firm expects to sell the finished garments at a wholesale price of ₦4,800 per metre of fabric used.
Question Parts
(a)
Compute the total landed cost per metre of fabric in Naira, showing all steps (FOB conversion, freight, duty, surcharge).
(b)
Determine the gross profit per metre of fabric and state the profit‑margin percentage.
(c)
If the Naira depreciates to ₦500 per US$ after the contract is signed but before payment, recalculate the landed cost per metre and discuss the impact on profitability.
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Question 5 View Details
A retailer deals in two product lines, A and B. The following information is available for a typical month: - Purchase cost per unit: Product A = ₦2,500; Product B = ₦1,800. - Additional variable costs per unit: Packaging = ₦200 for A, ₦150 for B. - Selling price per unit: Product A = ₦3,500; Product B = ₦2,600. - Expected sales mix: 60 % of units sold are A and 40 % are B. - Fixed operating costs (rent, salaries, utilities) = ₦150,000. Answer the following questions:
Question Parts
(a)
Determine the contribution margin per unit for each product. Then calculate the weighted‑average contribution margin per unit based on the sales mix and compute the break‑even point in total units (round up to the nearest whole unit). Show all working.
(b)
The retailer decides to offer a 10 % discount on the selling price of Product A for a promotional period, while the sales mix remains unchanged. Re‑calculate the weighted‑average contribution margin and the new break‑even point in total units. Comment on the effect of the discount on the break‑even analysis.
(c)
Discuss two advantages of using a perpetual inventory system for this retailer.
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Question 6 View Details
A wholesale dealer purchases a single product from a manufacturer and sells it to retailers. The following data apply: - Purchase price per unit = ₦1,200. - Freight cost per unit = ₦80. - Handling cost per unit = ₦20. - Manufacturer’s credit terms: 2 % discount if paid within 10 days, otherwise net 30 days. - Selling price to retailers = ₦1,800 per unit. - Wholesaler’s credit terms to retailers: 3 % discount if paid within 15 days, otherwise net 45 days. - Sales commission = 5 % of the selling price. - Fixed monthly operating costs (rent, salaries, utilities) = ₦80,000. Answer the following questions:
Question Parts
(a)
Calculate the effective cost per unit if the wholesaler takes the manufacturer’s 2 % discount and compare it with the cost per unit if the discount is not taken. Indicate which option is cheaper and show all calculations.
(b)
Using the cheaper effective cost obtained in part (a), determine the contribution margin per unit and compute the break‑even volume in units. Show your working.
(c)
If the wholesaler extends the credit period offered to retailers from net 45 days to net 60 days (keeping the 3 % discount for early payment), discuss qualitatively how this change could affect the wholesaler’s cash flow and the relevance of the break‑even analysis.
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Question 7 View Details
A group of three entrepreneurs is planning to start a small manufacturing business that will produce household cleaning products. They are considering two possible legal forms for the business: a partnership and a private limited liability company (Ltd).
Question Parts
(a)
State two advantages and two disadvantages of operating the business as a partnership under Nigerian law.
(b)
State two advantages and two disadvantages of operating the business as a private limited liability company.
(c)
Using the points raised in (a) and (b), compare the two forms with respect to (i) legal personality, (ii) liability of owners, (iii) ability to raise capital, and (iv) tax treatment.
(d)
Given that the entrepreneurs intend to expand the business within five years and wish to retain managerial control while limiting personal risk, recommend which legal form is more suitable and justify your recommendation.
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Question 8 View Details
A medium‑scale textile firm, TextileCo Ltd, needs ₦150 million to modernise its production line. The firm is evaluating four possible sources of finance: (i) internal retained earnings, (ii) a bank term loan, (iii) issuing new ordinary shares, and (iv) leasing the new machinery.
Question Parts
(a)
Discuss the advantages and disadvantages of using internal retained earnings as a source of finance for TextileCo, considering cost, risk and control.
(b)
Discuss the advantages and disadvantages of obtaining a bank term loan, assuming an interest rate of 12% per annum payable over 5 years.
(c)
Discuss the advantages and disadvantages of raising capital by issuing new ordinary shares, assuming the current market price per share is ₦5,000.
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