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


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

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

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

Slope = unit rate = $\frac{y_2-y_1}{x_2-x_1}$
= $\frac{1100-700}{300-100}$
= $\$2$

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

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

Fixed income amount on which tax is to be levied = $500-200$ = $\$300$

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

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

So, total tax levied on the earnings = $\$25+\$24=$ $\$49$