Theory question 108
Business CalculationsCommerce 2 (theory)
(a) What is turnover in commerce?
(b) List and explain six factors that determine the turnover of a product.
Show the model answer
Model answer
(a) Turnover is the total value of sales made by a business in a given period (also the rate at which stock is sold and replaced).
(b) Any six, explained: price of the product – lower prices raise sales; quality of the product; advertising and sales promotion; nature of the goods (perishables sell fast, durables slowly); location of the business; size of the market/population; income of consumers; competition; credit facilities; season/fashion; efficiency of distribution; attitude of sales staff.
Explanation
Each factor should say how it raises or lowers sales.