Salesmanship WASSCE (SC), 2021

Question 3

 

  1. Tion Ltd is a distributor of animal feeds. The company spent N 600,000 to purchase 200 bags of the product and two percent of the cost as delivery charges. After sales, the company made twenty percent profit from the transaction.
    Calculate:

    (a) Amount paid as delivery charge per bag;
  2. Cost price per bag of the product;
  3. Selling price per bag of the product;
  4. Profit made from the transaction by the company.

Profit made from the transaction.

Observation

 

(a) Quantity of animal feeds purchased = 200 bags                                          
     Amount spent – N 600,000                                                                         

Delivery charges (2% of N 600,000)                                                                                         
= 2/100 x 600,000 = 12,000                                         

 Amount paid as delivery charges per bag of feed =12,000 /200                 
= N 60

(b) Cost price per bag of the product = cost of the product plus delivery charge 1 mark
      = N 600,000/200 + N 60                                             
                                    = N 3,000 + N60 = N3, 060

(c) Selling price per bag of the product;

Selling price per bag = cost price + profit                                                  
Profit = 20% of cost price                                                    
20/100 X 3,060 = N 612                                                         
Selling price per bag of the product = N 3,060 + N 612                                 
= N 3,672 

(d) Profit = Selling price (SP) – Cost price (CP)                                            
                                     SP = N 3,672 X 200 = N 734,400                                                   
           CP = N 3,060 X 200 = N 612,000                                                   
                                      
Profits from the entire transaction = N 734,400 – N 612,000                                                                                = N 122,400