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Mr. Lumati is a hardware merchant. He purchases cement from Bamburi Cement Ltd. Which he then sells to his customers. Both Lumati and Bamburi Cement

Mr. Lumati is a hardware merchant. He purchases cement from Bamburi Cement Ltd. Which he then sells to his customers. Both Lumati and Bamburi Cement Ltd. require a profit margin of 20% on cost. Cement attracts 18% VAT. If the cost of production by Bamburi Cement Ltd. is Sh.220 per bag of 50Kg. At what price should Lumati sell a bag of cement including VAT?. (7 marks)

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