X Co. ltd a manufacturer purchases raw materials at sh.1,000,000. The company then incurs conversion costs which
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X Co. ltd a manufacturer purchases raw materials at sh.1,000,000. The company then incurs conversion costs which are estimated at 40% of material cost. The profit mark-up is 20% of total cost. The completed product is sold to Y wholesalers who then incur conversion cost of 50% on cost. The wholesaler's mark-up is 10% on cost. The wholesaler sells the product to a retailer, who has no conversion costs but sells at a profit of 30%.
Required: Assuming VAT is charged at 15% on all products compute the total VAT payable.
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