Assume that a product has the following three stages of production: $\begin{array}{cc}
\text { Production Stage } & \text { Selling Price } \
1 & € 1,00 \mathrm{C} \
2 & € 2,000 \
3 & € 3,000
\end{array}$ If the value-added tax (VAT)rate is 15 percent,what would be the VAT over all stages of production?

Question

Quizplus · Accepted Answer

- The VAT is calculated as a percentage of the selling price at each stage of production. 
- For stage 1, the VAT is 15% of €1,00 = €0,15. 
- For stage 2, the VAT is 15% of €2,000 = €300. 
- For stage 3, the VAT is 15% of €3,000 = €450. 
- Therefore, the total VAT over all stages of production is €0,15 + €300 + €450 = €450. 
- So, the correct answer is C.

Assume That a Product Has the Following Three Stages of Production