Question 3
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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.
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Calculate:
(a)Amount paid as delivery charge per bag;
(b)Cost price per bag of the product;
(c)Selling price per bag of the product; - (d)Profit made from the transaction by the company.
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 = 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 made from the transaction
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
Comments
Question 3 involves incomplete/single entry involving percentages. The aspect required calculation of the percentage on the known figure to find the unknown. Some candidates got to a certain stage of the calculation and gave up as they might have seen the question to be tough which also affected their ability to score good marks.