Question
Firm Q and Firm R conduct business in a foreign country that imposes a 3 percent VAT. Firm Q produces entertainment videos at a $6.8
Firm Q and Firm R conduct business in a foreign country that imposes a 3 percent VAT. Firm Q produces entertainment videos at a $6.8 material cost per unit and sells the videos to Firm R for $9.5 per unit. Firm R sells the videos at retail for $10.7 per unit. This year, the combined efforts of Firm Q and Firm R resulted in sales of 9.8 million videos to the public. Compute the VAT for each firm. (Enter your answers in dollars not in millions of dollars.)
Please solve like: sales revenue x number of units - cost of sales x number of units = value added x rate and express in dollars. The other method is not correct (believe me, I tried).
Thanks.
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