A manufacturing company 'P' sells a Desert cooler to a dealer A for Rs 8100 including sales tax (under VAT). The dealer A sells it to a dealer B for Rs 8500 plus sales tax and the dealer B sells it to a consumer at a profit of Rs 600. If the rate of sales tax (under VAT) is 8%, find
(i) the cost price of the cooler for the dealer A.
(ii) the amount of tax received by the Government.
(iii) the amount which the consumer pays for the cooler.

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Solution

Dear student,

$(i) L e t C . P . o f t h e c o o l e r = R s . x T h e n, (1 + \frac{8}{100}) * x = 8100 \Rightarrow \frac{27}{25} * x = 8100 \Rightarrow x = \frac{8100 * 25}{27} = R s . 7500 (i i) A m o u n t p a i d b y t h e \cos t o m e r = (8500 + (0.08 * 8500)) + 600 = R s . 9780 T a x p a i d b y t h e c u s t o m e r = \frac{8}{100} * 9780 = 782.4 T a x r e c e i v e d b y t h e g o v e r n m e n t = (782.4 + (8100 - 7500) + (0.08 * 8500)) = 782.4 + 600 + 680 = R s . 2062.4 (i i i) A m o u n t p a i d b y t h e c u s t o m e r = R s . 9780$

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