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Question
An electronics manufacturer sells an LCD to the dealer for Rs 25,000. The dealer sells it to the retailer at Rs 32,000 and the retailer sells it to the customer at Rs 45,000. If tax is levied at each stage at the rate of 10%, find the tax paid by the manufacturer, dealer and the retailer.
Solution
Selling price for manufacturer= Rs 25,000
Tax paid by manufacturer= 10 % of Rs 25,000
`= 10/100 xx "Rs" 25000`
= Rs 2,500
Tax paid by manufacturer= Rs 2,500
Selling price for dealer= Rs 32,000
Cost price for dealer= Rs 25,000
Profit= Rs (32,000 - 25,000) =Rs 7,000
Tax paid by dealer= 10 % of Rs 7,000
`= 10/100 xx "Rs" 7000`
= Rs 700
Tax paid by dealer= Rs 700
Selling price for retailer= Rs 45,000
Cost price for retailer = Rs 32,000
Profit= Rs ( 45,000 - 32,000) =Rs 13,000
Tax paid by retailer= 10 % of Rs 13,000
`= 10/100 xx "Rs" 13000`
= Rs 1,300
Tax paid by retailer= Rs 1,300
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