Question

The total number of bicycle parts sold is $550$. The tax rate is $8\%$ and the tax levied on fixed income above $₹200$ is $2.5\%$. Find the total tax levied on the total earnings using the data from the graph below.

• A. ₹44
• B. ₹49
• C. ₹55
• D. ₹59

Answer 1

The correct option is B ₹49


$\text{Total units sold =}500$
Here, slope indicates the cost of 1 unit.

From the graph, consider the points (100, 700) and (300, 1100)

You know,
$\text{Slope = unit rate =}\frac{y_2-y_1}{x_2-x_1}$

Putting values, you get:
$\text{Slope = unit rate =}\frac{y_2-y_1}{x_2-x_1}$
$=\frac{1100-700}{300-100}$
$=₹2$

$\text{Now, fixed income =}₹500$
Earnings from the sale of parts = $₹2\times 500$ = $₹1000$

$\text{So, tax on earnings =}2.5\%of₹1000$
$=\frac{2.5}{100}\times ₹1000=₹25$

Tax is levied on fixed income above ₹200.
Fixed income amount on which tax is to be levied = ₹500 - ₹200 = ₹300

$\text{∴ Tax on fixed income =}8\%of₹300$
$=\frac{8}{100}\times ₹300=₹24$

$\text{So, total tax levied on the earnings =}$
$₹25+₹24=₹49$