‘A’ is a manufacturer of ‘Geysers’. The cost price of each Geyser is Rs. 3447. He sells to ‘B’, and ‘B’ sells to ‘C’. ‘C’ sells them to ‘D’, the retailer. The tax rate is 11.5% and the profit is Rs. 305 at each stage of the selling chain. Find:
(i) the total amount of VAT; and
(ii) the amount that the purchaser will have to pay.

Open in App

Solution

CP for A = Rs.3448
Profit for A = Rs. 305
VAT is applied on (3448 + 305) = 3752.
$∴ V A T_{1} = 11.5 %$ of 3752 = 451.48 ...(1)

CP for B = Rs. 4183.48
Profit for B = Rs. 305
VAT is applied on (4183.48 + 305) = 4488.48
$V A T_{2}$ =516.1752
SP for B = 5004.6552 ...(2)

CP for C = Rs. 5004.6552
Profit for B = Rs. 305
VAT is applied on (5004.6552 + 305) = 5309.6552
$V A T_{3}$ =610.610 ...(3)
SP for C = Rs. 5920.2655

CP for D = Rs. 5920.2655
Profit for D = Rs. 305
VAT is applied on (5004.6552 + 305) = 6225.2655
$V A T_{4}$ =351.906
SP for D = CP for purchases = 6941.17

Total VAT = 431.48 + 516.1752 + 610.610 + 751.906
Total VAT = 32310.1712.

Suggest Corrections

Similar questions

Q. 'A' is a manufacturer of electric iron. The cost price of each electric iron is Rs 1,600. A sells to 'B' and 'B' sells to 'C' and 'C' sells them to 'D' the retailer. The tax rate is 12.5% and the profit is Rs 150 at each stage of the selling chain. Find (i) the total amount of VAT, and (ii) the amount that the purchaser will have to pay.
[4 MARKS]

Q. 'A' is a manufacturer of DVD player. The cost price of each DVD player is Rs 3,500. A sells to 'B' and 'B' sells to 'C' and 'C' sells them to 'D' the retailer. The tax rate is 12% and the profit is Rs 300 at each stage of the selling chain. Find (i) the total amount of VAT, and (ii) the amount that the purchaser will have to pay.
[4 MARKS]

Q. (Assumption: Profit is Rs 20 at each stage of the selling chain). The manufacturer A, the sale distributor B, the wholesaler C, and the retailer D live in the same state where the rate of VAT is 8%. The cost price of A's commodity is Rs 200. Find the amount of VAT if A sells to B, B sells to C, and C sells to D. Also, find the selling price of D.
[4 MARKS]

Nilay purchases an item from the manufacturer for Rs 216 which he sells to Rahul, Rahul sells it to Naman and Naman sells it to Harshil who sells it to the customer. The VAT rate is 10% and the profit is Rs 20 at each stage of the selling chain. Find:

i) amount of VAT deposited to the Government

ii) total price paid by the customer for the item

A manufacturing company M sells a computer to a distributor D for Rs 22000. The distributor D sells it to a retailer R for Rs 24750 and the retailer sells it to a consumer for Rs 26,000. If the rate of sales tax (under VAT) is 10%, find:

i) the amount of VAT collected by the government on the sale of computer

ii) the amount that the consumer pays for the machine.

Join BYJU'S Learning Program