a publisher sets the selling price of a book at rupees 15.60 per copy he pays royalty to the author as follows 2 % of the selling price for the first 3000 copies sold 5% of the selling price for the next 3000 copies sold and 15% of the selling price for the remaining copies sold. A)11550 copies of the book was sold calculate (i)number of the amount of royalty earned by the author( ii) total profit made by the publisher, given that the production cost incurred is rupees 68000 also find the profit percent made by the publisher
B)the price of the book includes 8 % VAT calculate the amount of tax paid for the book
Answers
Cost of 1 book = Rs 15.60
Number of books sold = 11,550
Find the total selling price:
Total Selling Price = 11550 x 15.60 = Rs 180,180
Find the royalty fee paid for the first 3000 books:
Selling Price = 3000 x 15.60 = Rs 46,800
Royalty Fee = 2% of Rs 46,800 = 0.02 x 46800 = Rs 936
Find the royalty fee paid for the next 3000 books:
Selling Price = 3000 x 15.60 = Rs 46,800
Royalty Fee = 5% of Rs 46,800 = 0.05 x 46800 = Rs 2340
Find the royalty fee paid for the remaining books:
Total books remaining = 11550 - 3000 - 3000 = 5550
Selling Price = 5550 x 15.60 = Rs 86,580
Royalty Fee = 15% of Rs 86,580 = 0.15 x 86580 = Rs 12987
Find the total royalty fee:
Total = 936 + 2340 + 12987 = Rs 16,263
Find the Profit:
Profit = Selling Price - Cost of production - Royalty Fee
Profit = 180,180 - 68,000 - 16,263 = Rs 95,917
Find the cost Price:
Cost Price = Selling Price - Profit
Cost Price = 180,180 - 95,917 = Rs 84,263
Find the profit Percentage:
Profit Percentage = Profit / Cost Price x 100
Profit Percentage = 96,917 / 84,263 x 100 = 115%
Find the VAT for one book:
VAT = 8%
Selling Price = 100 + 8 = 108%
108% = Rs 15.60
1% = 15.60 ÷ 108 = 13/90
8% = 13/90 x 8 = Rs 1.56
Find the VAT for 11550 books:
1 book = Rs 1.56
11550 books = 1.56 x 11550 = Rs 13346.67
Answer: (A) (i) Rs 16,263 (ii) Rs 95,917 (B) Rs 13346.67