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# A wholesaler buys a TV from the manufacturer for Rs 25,000. He marks the price of the TV 20% above his cost price and sells it to a retailer at a 10% discount on the marked price. If the rate of VAT is 8%, find the : (i) Marked price (ii) Retailer's cost price inclusive of tax (iii) VAT paid by the wholesaler. [3 MARKS]

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Solution

## Each subpart: 1 Mark Let C.P. of manufacturer be Rs x VAT = 8% So, S.P. of manufacturer = Rs 25000 Hence, x+8%of x=25000 ⇒ x+8x100=25000 ⇒ 108x100=25000 ⇒ x=25000×100108 ∴ x=Rs 23148 Now C.P. of TV for wholesaler Rs 25000 (i) Marked price of TV = Rs25000+20% of 25000 =Rs 25000+Rs25000×20100 =Rs 25000+Rs 5000 = Rs 30000 (ii) C.P. of TV for retailer =Rs 30000−Rs 30000×10%(discount) = Rs 30000 - Rs 3000 = Rs 27000 Now, C.P. of TV for retailer inclusive of tax = Rs 27000 +Rs 2700×8%(VAT) = Rs 27000 + Rs 27000×8100 = Rs 27000 + Rs 2160 = Rs 29160 (iii) VAT paid by the wholesaler = Rs 25000 - Rs 23148 = Rs 1852  Suggest Corrections  1      Similar questions  Related Videos   Sum invested , Rate of return , Brokerage and GST
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