Table 6-6 Shows the Different Stages in the Production of an Office

Multiple Choice

Table 6-6 shows the different stages in the production of an office building. A mining firm extracts iron from the earth. A steel mill converts the iron to steel beams for use in construction. A construction company uses the steel beams to make a building. Assume that the total product of these firms represents the only components of the building and that they will have no other uses.
Table 6-6

-Refer to Table 6-6. Suppose the value-added tax is 10%. What is the total VAT collected from all stages of production including final sale?

A) $1,050,000
B) $127,500
C) $95,000
D) $72,500