Practice waec model questions vol1 commerce 2024 Past Questions

Question 1 View Details

A trader purchases 120 metres of fabric at ₦2,500 per metre. He sells part of the stock at a profit of 20 % and the remaining stock at a profit of 30 %. If his total revenue from the sale is ₦380,000, how many metres were sold at the 20 % profit?

A. 45

B. 30

Correct C. 40

D. 55

Correct Answer: C

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Question 2 View Details

A mobile telephone subscriber is billed according to the following tariff: the first 200 minutes are charged at ₦150 per minute, the next 300 minutes (i.e., minutes 201 to 500) at ₦120 per minute, and any minute beyond 500 at ₦100 per minute. In a month the subscriber used 720 minutes. The provider gives a 5 % discount on the total charge before adding a value‑added tax (VAT) of 7.5 %. What is the final amount payable, in naira, rounded to the nearest naira?

A. 87200

Correct B. 89870

C. 91000

D. 94500

Correct Answer: B

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Question 3 View Details

An investor buys shares of XYZ Ltd on the Nigerian Stock Exchange in three separate transactions:\n1. 500 shares at ₦1,200 each, brokerage commission 0.5 % of the transaction value;\n2. 300 shares at ₦1,350 each, commission 0.4 %;\n3. 200 shares at ₦1,500 each, commission 0.3 %.\nLater the investor sells all 1,000 shares at a uniform price of ₦1,620 per share. The selling transaction incurs a brokerage commission of 0.6 % and a capital gains tax (CGT) of 10 % on the profit (profit before tax). What is the net profit after all commissions and CGT, in naira, rounded to the nearest naira?

A. 268812

Correct B. 269784

C. 278532

D. 274752

Correct Answer: B

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Question 4 View Details

A transport company operates a truck that incurs the following monthly fixed costs: driver's salary ₦120,000, insurance ₦30,000, and loan repayment ₦45,000. Variable costs are fuel at ₦210 per litre with a consumption of 0.35 litre per kilometre, and maintenance costing ₦0.25 per kilometre. The company charges a freight rate of ₦1,200 per kilometre. How many kilometres must the truck travel in a month to achieve a profit of at least ₦150,000? (Assume all costs and revenue are linear with distance.)

A. 308

Correct B. 307

C. 306

D. 300

Correct Answer: B

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Question 5 View Details

An insurance company offers a motor vehicle comprehensive policy. The base premium is 3 % of the vehicle's market value. Because the driver is 28 years old with a 2‑year driving record, a loading factor of 1.25 is applied. After loading, a no‑claim discount of 15 % is granted. Finally, a policy tax of 5 % is added to the discounted premium. If the market value of the vehicle is ₦2,800,000, what is the total amount payable for the policy (including tax), rounded to the nearest naira?

A. 89250

B. 74970

C. 62475

Correct D. 93713

Correct Answer: D

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Question 6 View Details

A transport company charges a base fee of ₦4,000 per trip. For the first 100 km it charges ₦30 per kilometre and for each kilometre beyond 100 km it charges ₦20 per kilometre. If a trader paid a total transport cost of ₦13,200 for a trip, what was the distance travelled (in kilometres)?

A. 306

B. 610

Correct C. 410

D. 460

Correct Answer: C

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Question 7 View Details

A businessman borrows ₦1,500,000 from a bank. The bank charges simple interest of 12% per annum for the first 2 years and 8% per annum for each subsequent year. An upfront processing fee equal to 1.5% of the principal is also payable. If the total amount he repays (principal + interest + fee) is ₦2,122,500, for how many years was the loan outstanding?

A. 5

Correct B. 4

C. 6

D. 3

Correct Answer: B

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Question 8 View Details

A bus can carry a maximum of 50 passengers per trip. The fixed cost per trip (driver salary, fuel, maintenance) is ₦12,000. Each passenger pays a fare of ₦800. For every passenger beyond the 30th, the company must pay an additional congestion surcharge of ₦150 per passenger. The company wants to earn at least ₦5,000 profit on a trip. What is the minimum number of passengers the bus must carry to meet this target?

A. 21

Correct B. 22

C. 30

D. 23

Correct Answer: B

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Question 9 View Details

A warehouse manager wants to determine the optimal order quantity (EOQ) for a product. Annual demand is 12,000 units and the ordering cost per order is ₦2,500. The holding cost is 15% of the unit cost per year. The manager knows that when the EOQ is used, the total annual cost (ordering + holding) is exactly ₦30,000 and that the EOQ is an integer that divides the annual demand evenly. What is the unit cost of the product (in ₦)?

Correct A. 100

B. 150

C. 80

D. 120

Correct Answer: A

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Question 10 View Details

A retailer purchases goods for a total cost of ₦48,000 and sells them for ₦60,000. What is the profit percentage on the cost price?

A. 20

Correct B. 25

C. 30

D. 15

Correct Answer: B

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Question 11 View Details

State two essential functions performed by a merchant in the course of commerce.

Correct A. Buying and selling goods; providing credit to customers

B. Negotiating contracts; providing legal advice

C. Transporting goods; offering insurance

D. Manufacturing products; managing inventory

Correct Answer: A

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Question 12 View Details

A manufacturing firm needs ₦5,000,000 to purchase new equipment. It can raise finance from three sources: - Bank loan at 12% p.a. (maximum 40% of total financing) - Issuing new shares at a cost of 15% p.a. (minimum 20% of total financing) - Retained earnings at a cost of 10% p.a. (minimum 30% of total financing) All three sources must be used. Determine the weighted average cost of capital (WACC) that minimises the firm's financing cost under these constraints.

A. 10.8%

B. 13.0%

Correct C. 11.2%

D. 12.5%

Correct Answer: C

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Question 13 View Details

A wholesaler buys a product at ₦250 per unit. He sets a list price that gives a 20% profit margin over cost before any discounts. Retailers receive a trade discount of 5% on the list price and, if they pay cash within 10 days, an additional cash discount of 2% on the discounted price. Calculate (a) the cash price a retailer pays after both discounts, and (b) the wholesaler's actual profit margin on that cash price (expressed to one decimal place).

A. ₦285.00; 11.7%

B. ₦294.00; 15.0%

C. ₦279.00; 10.4%

Correct D. ₦279.30; 10.5%

Correct Answer: D

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Question 14 View Details

Three partners A, B and C form a partnership. Their capital contributions are ₦120,000, ₦180,000 and ₦200,000 respectively. The profit‑sharing agreement states that each partner's share is proportional to the product of his capital contribution and a work factor: full‑time work factor = 2, part‑time work factor = 1, silent‑partner factor = 0.5. Partner A works full‑time, B works part‑time and C is a silent partner. If the partnership earns a net profit of ₦150,000, how much profit does each partner receive?

A. A: ₦58,065; B: ₦43,548; C: ₦48,387

Correct B. A: ₦69,231; B: ₦51,923; C: ₦28,846

C. A: ₦69,231; B: ₦28,846; C: ₦51,923

D. A: ₦36,000; B: ₦54,000; C: ₦60,000

Correct Answer: B

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Question 15 View Details

An importer in Nigeria buys electronic goods worth $50,000. The exchange rate is ₦460 per US$. The bank charges a commission of 1.5% on the Naira amount obtained after conversion and gives a 0.5% discount on that commission if payment is made within 7 days. A customs duty of 5% is then levied on the total Naira amount after the (discounted) commission but before duty. Calculate the total amount in Naira the importer must pay if the early‑payment discount is taken. Round the final answer to the nearest naira.

A. ₦24,150,000

B. ₦24,389,689

C. ₦24,512,250

Correct D. ₦24,510,439

Correct Answer: D

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Question 16 View Details

A Nigerian exporter ships 10,000 identical units of a product. The exporter wants to set a FOB price per unit (in US dollars) that will give a profit of ₦200,000 after the following costs are incurred: - Freight charge for the whole shipment: US$500. - Marine insurance is charged at 0.5% of the CIF value (CIF = FOB + freight + insurance). - Customs duty is 5% of the CIF value. - The exporter converts the total US$ received from the buyer into Naira at the official rate of ₦750 per US$, but the bank deducts a commission of 2% on the amount converted. Assuming the profit target is measured after all the above costs and the bank commission, what should be the minimum FOB price per unit (in US$, rounded to two decimal places) that the exporter must set?

Correct A. $0.09

B. $0.07

C. $0.10

D. $0.08

Correct Answer: A

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Question 17 View Details

A retailer sells a product at a regular price of ₦1,200 per unit. The variable cost per unit is ₦720 and the fixed monthly cost is ₦150,000. To encourage bulk purchases, the retailer offers a 10% discount on the selling price for any buyer who purchases at least 200 units in a single transaction (the discounted price is therefore ₦1,080 per unit). The conversion (i.e., purchase) rates are 0.02% of regular‑price buyers and 0.05% of bulk‑price buyers. Assuming the retailer can sell any number of regular and bulk units in a month, what is the minimum total number of units that must be sold (regular plus bulk) in the month to achieve a profit of at least ₦100,000? State the answer as the smallest integer total units.

Correct A. 571

B. 590

C. 560

D. 580

Correct Answer: A

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Question 18 View Details

A company plans an 8‑week advertising campaign using two media: television and newspaper. - TV spot: costs ₦150,000 per week, reaches 4,000,000 viewers each week, and 0.10% of those who see the ad purchase the product. - Newspaper ad: costs ₦30,000 per week, reaches 1,000,000 readers each week, and 0.05% of those who see the ad purchase the product. Each unit sold yields a profit of ₦200. The company may run the TV spot for w_T weeks and the newspaper ad for w_N weeks (0 ≤ w_T, w_N ≤ 8, integers). Determine the combination (w_T, w_N) that achieves a profit of at least ₦5,000,000 with the smallest possible total number of weeks (w_T + w_N). State the answer as two integers separated by a comma (TV weeks, Newspaper weeks).

A. 7,1

B. 6,2

C. 5,3

Correct D. 8,0

Correct Answer: D

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Question 19 View Details

A firm uses two communication channels to promote a new product. - Social‑media campaign: costs ₦120,000, reaches 300,000 people, each of whom sees the message 4 times. - Radio campaign: costs ₦80,000, reaches 200,000 listeners, each hearing the ad 3 times. Market research shows that 30% of the radio audience also follows the firm on social media; these overlapping individuals experience the combined number of exposures (i.e., 4 + 3 = 7). The firm wants to achieve at least 1,000,000 total exposures (the sum of all exposures across all individuals). Determine the minimum total cost required to meet this exposure target, assuming the firm may run either or both campaigns. Provide the answer in Naira.

A. 80000

B. 200000

Correct C. 120000

D. 150000

Correct Answer: C

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Question 20 View Details

An insurance company offers a fire‑insurance policy with a sum insured of ₦5,000,000. Historical data indicate that the probability of a fire claim in a year is 0.004. The policy includes a deductible of ₦200,000, meaning the insurer pays only the amount of loss exceeding the deductible. The company wishes to add a loading of 25% on the pure premium to cover administrative expenses and profit, and after loading a tax of 10% is applied to the premium. What annual premium should the company charge for this policy?

A. 24000

Correct B. 26400

C. 28800

D. 26000

Correct Answer: B

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Question 21 View Details

A trader purchases goods worth ₦150,000. He receives a trade discount of 10% on the invoice, then a cash discount of 2% on the balance, and finally pays VAT of 5% on the amount after both discounts. What is the total amount payable?

A. 132300

B. 139800

C. 140490

Correct D. 138915

Correct Answer: D

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Question 22 View Details

A retailer sells a product for ₦8,500 per unit. The variable cost per unit is ₦5,200 and the monthly fixed costs are ₦96,000. How many units must be sold each month to achieve a profit of at least ₦24,000?

A. 35

B. 38

C. 36

Correct D. 37

Correct Answer: D

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Question 23 View Details

A wholesaler purchases a batch of goods for ₦2,400,000. He receives a trade discount of 12% on the invoice and then adds his usual markup of 25% on the discounted price to set the wholesale price. A retailer buys the batch and receives a cash discount of 3% on the wholesale price if payment is made within 10 days. The retailer then adds a 30% profit margin on his cost (after discount) to set the final selling price to consumers. If the batch contains 800 identical units, what is the final selling price per unit (rounded to the nearest naira)?

A. 4520

B. 3980

Correct C. 4162

D. 4325

Correct Answer: C

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Question 24 View Details

A wholesale dealer had opening stock of ₦1,200,000 and purchases during the year amounting to ₦4,800,000. The closing stock at year end was ₦1,500,000. During the year, the dealer's net sales were ₦7,200,000. Calculate the inventory turnover ratio (times) and the average days in inventory (rounded to the nearest day).

A. 2.90 times, 130 days

B. 3.75 times, 100 days

C. 3.00 times, 120 days

Correct D. 3.33 times, 110 days

Correct Answer: D

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Question 25 View Details

A consumer bought a refrigerator for ₦180,000. The warranty states that any defect occurring within 12 months will be repaired free of charge. After 8 months the refrigerator stopped cooling. The dealer took 15 days to diagnose the problem and a further 20 days to repair it, during which the consumer could not use the fridge. Consumer law provides that for a breach of warranty the consumer is entitled to a refund of the purchase price minus a reasonable depreciation of 20%, plus simple interest at the statutory rate of 12% per annum for the period the goods were unusable. What amount is the consumer entitled to receive as compensation (rounded to the nearest naira)?

Correct A. 145657

B. 154762

C. 182071

D. 145419

Correct Answer: A

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