WAEC Commerce 2016 Theory — Question 8

Model answer

(a) Turnover: This can be defined as the number of times a business replenish its stock over a period of time. It is the number of time purchases and sales are generated in the business. It determines the size of profit of the business. (b) Factors that determines turnover of a product: - Selling Price of the product: The price of a product determines how much of it the customers will purchase. - Cost of the product: Also, what the goods cost the seller will determine how much he will buy and stock over time. - Nature of the product: For consumable goods, they tend to have many turnovers has the buyer can store limited amount of it due to fear of spoilage and others. - Also, the volume of stock the seller intends to keep at a particular time may also determine turnover. - The level of advertisement for the product too can determine the turnover. The more the advert made, the more tendency to improve sale and the more the turnover. - Finally, sales promotion too can improve sales which will consequentially improve turnover.