Question

An import company brought into the country some amplifiers that cost sh. 3,750-each. The government imposed an import duty of 125% and a sales tax of 20 %. If the company decided to make a 10% profit on the sales, calculate the selling price of each amplifier. ​

Answer 1

To calculate the selling price of each amplifier, we need to consider the cost, import duty, sales tax, and the desired profit margin.

Cost of each amplifier: sh. 3,750

Import duty of 125% on the cost:

Import duty = 125% of sh. 3,750

= 125/100 * sh. 3,750

= sh. (125/100 * 3,750)

= sh. 4,687.50

Cost of each amplifier including import duty:

Total cost = Cost + Import duty

= sh. 3,750 + sh. 4,687.50

= sh. 8,437.50

Sales tax of 20% on the total cost:

Sales tax = 20% of Total cost= 20/100 * sh. 8,437.50

= sh. (20/100 * 8,437.50)

= sh. 1,687.50

Total cost including sales tax:

Total cost = Total cost + Sales tax

= sh. 8,437.50 + sh. 1,687.50

= sh. 10,125

Desired profit margin of 10% on the total cost:

Profit = 10% of Total cost

= 10/100 * sh. 10,125

= sh. (10/100 * 10,125)

= sh. 1,012.50

Selling price of each amplifier:

Selling price = Total cost + Profit

= sh. 10,125 + sh. 1,012.50

= sh. 11,137.50