Question

A retail trader purchased certain CCTV's from a wholesaler who had purchased the same
from a manufacturer. In each transaction the concerned seller levied 18% GST. Wholesaler
earned a profit of 25%. If retail trader paid 51.344.75 for this transaction, then what is the
original price for the manufacturer?​

Answer 1

Answer: The original price for the manufacturer is Rs. 27,619.37

Step-by-step explanation:

We have transactions between the manufacturer and the wholesaler and the wholesaler and the retailer. In each transaction, the 18% GST is levied.

We have the final cost of the CCTV to the retailer, which is 51,344.75.

At this price, the wholesaler made a 25% profit, hence this amount is 125%.

Therefore, because we want to get the real price if the CCTV without any profits, we are going to look for the value of 100%, such that;

51,344.75 = 125%

100%?

In this case, we cross multiply, in that

(51344.75 × 100) ÷ 125

This gives us 41,075.80

There was also the 18% GST levied. Since we want to get the price without the GST, we subtract 18% from the 100%, which gives us 82%.

82% is same as, 82/100 or 0.82

We then multiply the 0.82 by the 41,075.80, to get the price of the CCTV without the GST.

41,075.80 × 0.82 = 33,682.16

33,682.16 is the cost of the CCTV to the wholesaler without the GST.

We are also aware that the manufacturer levied the 18% GST while selling to the wholesaler. We need the original price without this GST, which we have to also subtract the 18% from the 100%, to give us 82%.

Upon getting 82%, we multiply it by the 33,682.17

0.82 × 33,682.16 = 27,619.37, which is the price for the manufacturer.