The manufacturer Ms. Bhavna Saini produces a commodity for Rs 250, which she sells in the same state, where Ms. Bhavna Saini has her factory, 'Ms Shivangi Malik' the sale distributor, 'Ms. Shivika Jain' the wholesaler and 'Ms Lavanya' the retailer lives. The tax rate is 10%. The profit is Rs 20 at each stage of the selling chain. Find the amount of VAT and also the selling price of Ms. Lavanya.

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Solution

$\begin{matrix} B h a v n a & S h i v a n g i & S h i v i k a & L a v a n y a C . P . & R s 250 & R s 270 & R s 290 & R s 310 S . P . & R s 270 & R s 290 & R s 310 & R s 330 (w i t h o u t t a x) V A T = 10 % & R s 27 & R s 29 & R s 31 & R s 33 T a x c h a r g e d V A T \to & R s 27 & R s 2 & R s 2 & R s 2 \end{matrix}$
(i) Total VAT = Rs 27 + Rs 2 + Rs 2 + Rs 2 = Rs 33
(ii) SP of Lavanya = Rs 330 + Rs 33 = Rs 363

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BhavnaShivangiShivikaLavanyaC.P.Rs 250Rs 270Rs 290Rs 310S.P.Rs 270Rs 290Rs 310Rs 330(without tax)VAT=10%Rs 27Rs 29Rs 31Rs 33Tax chargedVAT→Rs 27Rs 2Rs 2Rs 2 (i) Total VAT = Rs 27 + Rs 2 + Rs 2 + Rs 2 = Rs 33 (ii) SP of Lavanya = Rs 330 + Rs 33 = Rs 363