A wholesaler buys a computer from a manufacturer for ₹ 40000. He marks the price of the computer 20% above his cost price and sells it to a retailer at a discount of 10% on the marked price. The retailer sells the computer to a consumer at the marked price. If the rate of sales tax (under VAT) is 10% at every stage, then choose the correct answer from the given four options.

#### Cost of the computer to the retailer inclusive of tax is

(a) ₹47520

(b) ₹ 43200

(c) ₹ 44000

(d) none of these

**Solution:**

(a) ₹ 47520

Explanation:

Rate of sales tax (VAT) = 10%

Sales tax charged = ₹ 43200 x

= ₹ 4320

Cost price of T.V. including S.T.

= ₹ 43200 + ₹ 4320

= ₹ 47520

#### VAT paid by the manufacturer is

(a) ₹ 4000

(b) ₹ 4320

(c) ₹ 320

(d) none of these

**Solution:**

(a) ₹ 4000

Explanation:

VAT paid by the manufacturer

= ₹ 40000 x

= ₹ 4000