Question

A manufacturer sells a product to a trader A for Rs 15,000. Trader A sold it to trader B at a profit of Rs 2,000 and trader B sold it to trader C at a profit of Rs 1,500. Trader C made a profit of Rs 2,500 when he sold it to a customer. If VAT is calculated at 5%, find the amount of tax paid to the government. Also, find the price paid by the customer for the machine.

Answer 1

S.P for the manufacturer= Rs 15,000

S.P. for trader A= Rs ( 15,000 + 2,000) =Rs 17,000 

S.P. for trader B =Rs ( 17,000 + 1,500) =Rs 18,500 

S.P. for trader C = Rs ( 18,500 + 2,500) = Rs 21,000

VAT charged by trader C = 5 %  of S.P. 

`= 5/100 xx  "Rs"  21000`

= Rs 1,050 

C.P. for the customer= S.P. + VAT 

=Rs (21,000 + 1,050) 

=Rs 22,050

Tax received by the government (VAT) =Rs 1,050 

Price paid by customer= Rs 22,050