(a) What is turnover? (b) The following... | WAEC SSCE - Commerce - 2006 (Essay)

Question 1 Report

(a) What is turnover?

(b) The following information relates to Mrs. Lulu, a trader.

Goods	selling price N	cost price N	selling expenses N
Buckets	4,000	3,500	400
Boxes	5,000	4,000	250
Bournvita	6,000	5,500	300
Lace material	12,000	10,500	1,000

(i) Calculate the gross profit percentage on each item. (ii) Calculate the net profit on each item.

Answer

(a) What is turnover?

Turnover is the total value of the net sales (goods sold to customers) made by a business over a given trading period. It is the sales figure after deducting returns inwards, and it is used to measure the volume of business done.

(b) Mrs. Lulu's trading items

Goods	Selling price (N)	Cost price (N)	Selling expenses (N)
Buckets	4,000	3,500	400
Boxes	5,000	4,000	250
Bournvita	6,000	5,500	300
Lace material	12,000	10,500	1,000

(i) Gross profit percentage on each item

Gross profit = Selling price - Cost price. The gross profit percentage is expressed on cost price (mark-up):

\[ \text{GP \%} = \frac{\text{Gross profit}}{\text{Cost price}} \times 100 \]

Goods	Gross profit (N)	Working	GP % (on cost)
Buckets	500	(500 / 3,500) x 100	14.29%
Boxes	1,000	(1,000 / 4,000) x 100	25.00%
Bournvita	500	(500 / 5,500) x 100	9.09%
Lace material	1,500	(1,500 / 10,500) x 100	14.29%

(ii) Net profit on each item

Net profit = Gross profit - Selling expenses.

Goods	Gross profit (N)	Selling expenses (N)	Net profit (N)
Buckets	500	400	100
Boxes	1,000	250	750
Bournvita	500	300	200
Lace material	1,500	1,000	500

Read lesson note on Business Capital And Profits (WAEC)

Answer Details

(a) What is turnover?

(b) Mrs. Lulu's trading items

Goods	Selling price (N)	Cost price (N)	Selling expenses (N)
Buckets	4,000	3,500	400
Boxes	5,000	4,000	250
Bournvita	6,000	5,500	300
Lace material	12,000	10,500	1,000

(i) Gross profit percentage on each item

Gross profit = Selling price - Cost price. The gross profit percentage is expressed on cost price (mark-up):

\[ \text{GP \%} = \frac{\text{Gross profit}}{\text{Cost price}} \times 100 \]

Goods	Gross profit (N)	Working	GP % (on cost)
Buckets	500	(500 / 3,500) x 100	14.29%
Boxes	1,000	(1,000 / 4,000) x 100	25.00%
Bournvita	500	(500 / 5,500) x 100	9.09%
Lace material	1,500	(1,500 / 10,500) x 100	14.29%

(ii) Net profit on each item

Net profit = Gross profit - Selling expenses.

Goods	Gross profit (N)	Selling expenses (N)	Net profit (N)
Buckets	500	400	100
Boxes	1,000	250	750
Bournvita	500	300	200
Lace material	1,500	1,000	500

Read lesson note on Business Capital And Profits (WAEC)

Business Capital And Profits

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(a) What is turnover? (b) The following information relates to Mrs. Lulu, a trader. Goods selling price N cost price N selling expenses N Buckets 4,000 3,50...

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(a) What is turnover? (b) The following information relates to Mrs. Lulu, a trader. Goods selling price N cost price N selling expenses N Buckets 4,000 3,50...

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