A manufacturer fixed the price of an article at $250. The rate of sales tax on the article is 12%. A wholesaler bought it and sold the same to a shopkeeper at a profit of 10%. The shopkeeper sold the article to a consumer at a profit of 15%.
(a) Find the sum of money the consumer paid to buy the article.
(b) Find the VAT paid by the wholesaler and the retailer together.
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Answer:
a) $316.25 b) $26.79 & $29.47
Step-by-step explanation:
$250 includes 12% VAT so, its original price is 250x100/112 = $223.21
Wholesaler bought it at $250 & sold it at 10% profit = 110x250/100 = $275
Shopkeeper bought it at $275 & sold it at 15% profit = 115x275/100 = $316.25
So, customer paid $316.25 for the article.
VAT paid by Wholesaler is 250 - (250x100/112) = 275 - 223.21 = $26.79
VAT paid by Shopkeeper is 275 - (275x100/112) = 275 - 245.53 = $29.47
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