The Cost Of A Laptop Before GST Is 50,000. If The GST Rate Is 12%, Find The Total Cost After GST. CASE STUDY QUESTION​

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Calculating the Total Cost of a Laptop after GST

Understanding the Problem

In this case study, we are given the cost of a laptop before GST (Goods and Services Tax) as $50,000. We are also given the GST rate as 12%. Our objective is to find the total cost of the laptop after GST is applied.

What is GST?

GST is a type of consumption tax that is levied on the sale of goods and services in many countries, including Australia, New Zealand, and India. It is a value-added tax (VAT) that is applied at each stage of production and distribution, from the manufacturer to the consumer.

Calculating the GST Amount

To calculate the GST amount, we need to multiply the cost of the laptop before GST by the GST rate. The GST rate is given as 12%, which can be expressed as a decimal as 0.12.

Formula:

GST Amount = Cost of Laptop before GST x GST Rate GST Amount = $50,000 x 0.12

Calculating the GST Amount

Now, let's calculate the GST amount using the formula above.

GST Amount = $50,000 x 0.12 GST Amount = $6,000

Finding the Total Cost after GST

To find the total cost after GST, we need to add the GST amount to the cost of the laptop before GST.

Formula:

Total Cost after GST = Cost of Laptop before GST + GST Amount Total Cost after GST = $50,000 + $6,000

Calculating the Total Cost after GST

Now, let's calculate the total cost after GST using the formula above.

Total Cost after GST = $50,000 + $6,000 Total Cost after GST = $56,000

Conclusion

In this case study, we calculated the total cost of a laptop after GST is applied. We started with the cost of the laptop before GST as $50,000 and the GST rate as 12%. We then calculated the GST amount by multiplying the cost of the laptop before GST by the GST rate. Finally, we added the GST amount to the cost of the laptop before GST to find the total cost after GST.

Key Takeaways

  • The cost of the laptop before GST is $50,000.
  • The GST rate is 12%.
  • The GST amount is $6,000.
  • The total cost after GST is $56,000.

Real-World Application

This case study has real-world applications in various industries, including retail, manufacturing, and services. Businesses need to calculate the GST amount and add it to the cost of their products or services to determine the total cost after GST.

Tips and Variations

  • If the GST rate changes, the GST amount will also change.
  • If the cost of the laptop before GST changes, the GST amount will also change.
  • If the GST rate and the cost of the laptop before GST change simultaneously, the total cost after GST will also change.

Practice Problems

  1. If the cost of a laptop before GST is $40,000 and the GST rate is 10%, find the total cost after GST.
  2. If the cost of a laptop before GST is $60,000 and the GST rate is 15%, find the total cost after GST.
  3. If the cost of a laptop before GST is $80,000 and the GST rate is 20%, find the total cost after GST.

Solutions

  1. GST Amount = $40,000 x 0.10 = $4,000 Total Cost after GST = $40,000 + $4,000 = $44,000
  2. GST Amount = $60,000 x 0.15 = $9,000 Total Cost after GST = $60,000 + $9,000 = $69,000
  3. GST Amount = $80,000 x 0.20 = $16,000 Total Cost after GST = $80,000 + $16,000 = $96,000
    Q&A: Calculating the Total Cost of a Laptop after GST

Frequently Asked Questions

In this article, we will answer some frequently asked questions related to calculating the total cost of a laptop after GST.

Q1: What is GST and how does it affect the cost of a laptop?

A1: GST (Goods and Services Tax) is a type of consumption tax that is levied on the sale of goods and services in many countries. It is a value-added tax (VAT) that is applied at each stage of production and distribution, from the manufacturer to the consumer. GST affects the cost of a laptop by adding a percentage of the cost to the final price.

Q2: How do I calculate the GST amount?

A2: To calculate the GST amount, you need to multiply the cost of the laptop before GST by the GST rate. The GST rate is usually expressed as a percentage, and you need to convert it to a decimal by dividing by 100.

Q3: What is the formula for calculating the GST amount?

A3: The formula for calculating the GST amount is:

GST Amount = Cost of Laptop before GST x GST Rate

Q4: How do I calculate the total cost after GST?

A4: To calculate the total cost after GST, you need to add the GST amount to the cost of the laptop before GST.

Q5: What is the formula for calculating the total cost after GST?

A5: The formula for calculating the total cost after GST is:

Total Cost after GST = Cost of Laptop before GST + GST Amount

Q6: Can I use a calculator to calculate the GST amount and total cost after GST?

A6: Yes, you can use a calculator to calculate the GST amount and total cost after GST. You can also use online GST calculators or mobile apps to make the calculation easier.

Q7: What if the GST rate changes? How will it affect the total cost after GST?

A7: If the GST rate changes, the GST amount will also change. You need to recalculate the GST amount using the new GST rate and add it to the cost of the laptop before GST to find the new total cost after GST.

Q8: Can I use this formula to calculate the GST amount and total cost after GST for other products or services?

A8: Yes, you can use this formula to calculate the GST amount and total cost after GST for other products or services. Just replace the cost of the laptop before GST with the cost of the product or service before GST, and use the same GST rate.

Q9: What if I make a mistake in calculating the GST amount or total cost after GST?

A9: If you make a mistake in calculating the GST amount or total cost after GST, you need to recalculate the GST amount using the correct formula and add it to the cost of the laptop before GST to find the correct total cost after GST.

Q10: Can I use this formula to calculate the GST amount and total cost after GST for a business or organization?

A10: Yes, you can use this formula to calculate the GST amount and total cost after GST for a business or organization. Just replace the cost of the laptop before GST with the cost of the product or service before GST, and use the same GST rate.

Conclusion

Calculating the total cost of a laptop after GST is a simple process that involves multiplying the cost of the laptop before GST by the GST rate and adding the GST amount to the cost of the laptop before GST. By using the formula and following the steps outlined in this article, you can easily calculate the total cost after GST for a laptop or any other product or service.