WAEC 2019- COMMERECE
Commerce 2 (Essay) – 2:00 p.m. – 4:00p.m
Commerce 1 (Objective) – 4:00 p.m – 4:50 p.m.
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-: Actuarial Science
-:Chartered Accountancy (C.A)
-:Company Secretary (C.S)
Risk Taking: Practical Risks
One of the two primary functions of the entrepreneur is taking responsibility for the financial and practical risks of running their business. There are tools to help minimize potential risks, such as managing the risk of fire, theft or accidents by purchasing insurance with sufficient coverage limits. You can also limit losses due to fire, theft or accidents by following recommended risk management procedures provided by the insurance company. Keep employees trained and up to date in safety and loss-prevention procedures.
Risk Taking: Putting Money on the Line
Funding the business is another important part of the entrepreneur’s risk-taking function. If the entrepreneur’s products and services aren’t successful, entrepreneurs run the risk of losing their entire investment. Reduce financial risk by carefully selecting the products and services you sell. Evaluate the benefit of new or increased expenditures. Study market conditions, learn from the mistakes of others and plan how you will bring your products and services to scale to earn profit.
1ci) Extractive Industry: its the process that involve the extraction of raw materials from the earth to be used by consumers. The extractive industry consists of any operations that remove metals, mineral and aggregates from the earth.
1cii) Construction industry: it is a sector of national economy engaged in preparation of land and construction, alteration, and repair of buildings, structures, and other real property.
1ciii) Manufacturing industry refers to those industries which involve in the manufacturing and processing of items and indulge in either creation of new commodities or in values additions.
1civ) Tertiary Industry: The tertiary industry is the segment of the economy that provides services to its consumers, including a wide range of businesses such as financial institutions, schools and restaurants. It is also known as the tertiary sector.
CHOOSE ONLY THRRE
-Commodities exchanges provide a ready and continuous market for the purchase and sale of commodities. This enables the producer to be independent of middlemen and therefore to derive more value from their production activities.
-They provide hedging facilities, which make them necessary in reducing fluctuations in price of raw material and consequently also reducing fluctuations in the price of finished products.
-Commodities exchanges provide the producers an opportunity to transfer their risk to the professional risk-bearers.
-By providing continuity in the trading of commodities, commodities exchanges induce bankers and financiers to lend against commodities.
-Commodities exchanges provide facilities and opportunities for arbitrating and thus equalizing the price levels of commodities at various centers.
Long ago, to trade commodities one had to trade commodity futures and you can still trade this way currently. You need to simply open an account with a futures trading firm, obtain the needed front-end trading software and put up a substantial amount of money.
Of course, this method is not for every investor. Futures trading is actually extremely risky and requires professional trading skills and uncommon devotion. An ability to comprehend the essential markets and technical analysis are required to thrive.
(ii). Mutual Funds –
Mutual fund commodities offer not only portfolio diversification because they typically have a low correlation to a broad market index but also diversify various commodities within a single fund. However, there are a variety of fund types with a variety of risks: commodity funds, commodity funds that hold futures, natural resource funds and combination funds.
5a) Newspaper Advertising
ii) Journals/Magazine Advertising
iii) TV Advertising
v) internet Advertising
5b) Personal selling is also known as face-to-face selling in which a person who is the salesman tries to convince the customer in buying a product. It is a promotional method by which the salesperson uses his or her skills and abilities in an attempt to make a sale.
i) Two-Way Communication
ii) Immediate Feedback
iii) Individual Services
Pick Two 👇🏾👇🏾👇🏾
i) It has a Limited Reach
ii) it’s Expensive to run
iii) Potential ethical problems
iv) High Risk
Adverse or deficit balance of payment
(i)Foreign exchange control:Foreign exchange control involves the rationing foreign exchange in order to reduce balance of payment deficit
(ii)Expenditure reduction:This is used in order to cut down domestic demand and reduce imports
(iii)Expenditure switching:This involves the manipulation of exchange rates to induce people to patronize locally made goods.
(iv)Fiscal control:This involves the raising of tariffs ie increase import duties in order to reduce balance f payment deficit
(v)Devaluation:Devaluation cheapens exports and makes imports expensive,thus improving balance of payments
(vi)Reduction of imports: The government can restricts imports by the use of tariffs,quotas and outright embargo on imports
Pick any four
i) Provision of Efficient Means of Mail Delivery: Courier companies provide reliable and efficient means of sending urgent documents at greater speed.
ii) Safe Delivery of Document: Important documents are delivered safely without getting lost in transit.
iii) Door to Door Service: Courier companies provide door-to-door delivery services to its customers.
iv) Render Services in all Location: They render services to both urban and rural areas.
v) Banking Services: Banking transactions are facilitated by courier services and this has greatly reduced time taken in interbank transactions.
vi) Transportation of Load: Courier companies helps to carry bulky loads over short or long distances.
vii) Shipment of Goods: Some courier companies undertake the shipment of export and import goods.
[Pick any three (3) ]
i) Railway is the most convenient means of transporting bulky goods(raw and manufactured goods) to and from industrial areas.
ii) It is very cheap in the transportation of people and goods from one place to place.
iii) Maintenance cost is low.
iv) It is a free natural route to use.
v) It is relatively safe to use.
[pick any three (3)]
i) It involves high cost of construction.
ii) It is very slow and therefore not suitable for perishable goods
iii) Constant stopping in each station and changing of passengers waste a lot of time.
iv) Rail transport depends on roads to feed it with passengers and goods at different stations.
15 cartons of sweets @ N2,000 per carton
= 15 x 2000 = N30,000
25 cartons of milk @ N4000 per carton
= 25 x 4000 = N100,000
154 cartons of sugar @ N3,000 per carton
= 15 x 3000 = N45,000
17 cartons of soap @ N5,000 per carton
= 17 x 5,000 = N85,000
(i) Total cost price
Les 10% trade discount = 10% x 260,000
Invoice price = 26,000
Less 6% cash discount (8,040)
Cash paid N125,960
(ii) mark up = profit/cost price x 100/1
Therefore 20/100 = profit/125960
Therefore gross profit = 125,960 x 20/100 = N25,192
Selling price = cost price + Gross profit
= 125,960 + 25192 = N151,152
(iii) Net profit
Gross profit – Expense
Rent and rates = N3,500
Salaries and wages = N8,000
Fuel = N2,000
Electricity = N1,500
Net Profit = 25,192 – 15,000