Assume that a product has the following three stages of production: $$\begin{array} { c l }
\text { Production } & \text { Selling } \
\text { Stage } & \text { Price } \
\hline 1 & € 10 \
2 & € 250 \
3 & € 1,500
\end{array}$$ If the value-added tax (VAT)rate is 20%,what would be the VAT over all stages of production?

Question

Assume that a product has the following three stages of production: $$\begin{array} { c l } 
\text { Production } & \text { Selling } \
\text { Stage } & \text { Price } \
\hline 1 & € 10 \
2 & € 250 \
3 & € 1,500
\end{array}$$ If the value-added tax (VAT)rate is 20%,what would be the VAT over all stages of production?

Quizplus · Accepted Answer

To calculate the VAT over all stages of production, we need to find the VAT for each stage and add them together. 
The VAT for each stage can be calculated by multiplying the price of the stage by the VAT rate (20%) and then dividing by 100:

Stage 1 VAT = (10 x 20) / 100 = €2 
Stage 2 VAT = (250 x 20) / 100 = €50 
Stage 3 VAT = (1500 x 20) / 100 = €300

Total VAT = Stage 1 VAT + Stage 2 VAT + Stage 3 VAT = €2 + €50 + €300 = €352

Therefore, the correct answer is C) €300.

Assume That a Product Has the Following Three Stages of Production