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CIMAPRA19-F01-1 Exam - Topic 2 Question 126 Discussion

AA manufactures computers. These are sold to BB at $100 a computer plus a 5% sales tax. BB subsequently sells the computers to CC for $200 a computer plus a 5% sales tax. C sells the computers to customers at $300 a computer plus a 5% sales tax.The total tax received by the tax authority is $30.Which type of tax is described above?
D) Multi-stage cumulative sales tax
A) Single-stage sales tax
B) Value added tax
C) Retail tax

CIMAPRA19-F01-1 Exam - Topic 2 Question 126 Discussion

Actual exam question for CIMA's CIMAPRA19-F01-1 exam
Question #: 126
Topic #: 2
[All CIMAPRA19-F01-1 Questions]

AA manufactures computers. These are sold to BB at $100 a computer plus a 5% sales tax. BB subsequently sells the computers to CC for $200 a computer plus a 5% sales tax. C sells the computers to customers at $300 a computer plus a 5% sales tax.

The total tax received by the tax authority is $30.

Which type of tax is described above?

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Suggested Answer: D

by Eun at May 15, 2026, 10:53 AM

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Alysa
It's a value added tax since each stage adds value.
upvoted 0 times
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Elli
5 days ago
I’m confused about the difference between single-stage and multi-stage. I thought both could apply, but maybe the total tax amount helps clarify it?
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Jacquelyne
10 days ago
This question reminds me of a practice problem we did on multi-stage taxes. I feel like the answer could be that one.
upvoted 0 times
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Merri
15 days ago
I'm not entirely sure, but I remember something about retail tax being simpler and not involving multiple stages like this.
upvoted 0 times
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Margo
2 months ago
I think this might be a value added tax since it seems to be applied at each stage of the sale.
upvoted 0 times
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