Subject:
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Re: Cheap kits at TRU
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Newsgroups:
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lugnet.org.au
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Date:
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Sun, 9 Jul 2000 23:02:48 GMT
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Viewed:
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703 times
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"Mark Harrison" <harro1@one.net.au> wrote in message
news:39687492.703D04A4@one.net.au...
> 3409 had a recommended retail price of $59.95 inclusive of 22% wholesale • sales
> tax. If you remove the 22% tax then add on the 10% tax, surely we can • expect a
> 10% reduction in price or at least that's what the ACCC is telling us to
> expect.
hi
It doesn't quite work this way. This is the way that we did it at work,
which is (I think) the way it's meant to be done.
Say we buy a case of coke (390 ml bottles) for 18.50. This is 0.77 each.
This includes the 22% WST.
We sell these for 1.5, making a 0.73 gross profit.
We now go back to the case, and take off the 22% WST. Now, we buy the case
for 15.42 (taking off the gst that we pay for the case, as this is a tax
credit), making an item cost of 0.64.
We then add our profit margin back on (0.64 + 0.73). 1.37 is gst-free price.
Now add the gst. (1.37 + 10%) = 1.50
= same cost. Actually, the price of our coke dropped by 5c, but you get the
idea. Taking off the 22% WST, and adding on the 10% GST, doesn't necessarily
change the price. In general, the more expensive an item is, the greater the
difference in price, due to the profit margin on each item being a smaller
ratio of total price. For instance the 390ml bottles of coke dropped 5c
($1.5 to $1.45), but our 2l bottles of coke dropped 30c ($3.6 to $3.3.)
I hope this makes sense, and answers some of your questions.
later,
David Drew.
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Message is in Reply To:
 | | Re: Cheap kits at TRU
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| 3409 had a recommended retail price of $59.95 inclusive of 22% wholesale sales tax. If you remove the 22% tax then add on the 10% tax, surely we can expect a 10% reduction in price or at least that's what the ACCC is telling us to expect. TLG must (...) (24 years ago, 9-Jul-00, to lugnet.org.au)
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