Part II: Impact of a Sales Tax Increase Archie Windsor is a 19 year old college student at the University of Washington in Seattle. He works at Royal Foods earning $10.25/hour and his salary is used to purchase mostly goods and services such as food and basic day to day items. Also, to save money, he does not own a car but relies on campus transportation and the local area transit system to travel. Most of his food items are purchased at his job for convenience. Archie estimates 45% of his income is spent on food and basic items. Jeff Gates is a 60 year old CEO of a major corporation and lives in Medina, Washington. His hourly salary is roughly estimated to be $4400. He purchases food, basic day to day items as well as various luxury goods. Jeff hates shopping so relies on grocery delivery services for most of his food purchases. However, he does like to attend local farmers markets and artisanal grocery stores for his favorite specialty items. He estimates 15% of his income is spent on food and basic items. The current sales tax is 10% for the city of Seattle. This means that each time Archie and Jeff purchase $150 worth of food and basic items, they must also pay $15 in sales tax. 34. $15 represents how much of Archie's hourly income? Show your work!! 35. $15 represents how much of Jeff's hourly income? Show your work!! 36. Who does the sales tax impact more? Why? 37. If the sales tax increases to 12%, what percentage of Archie's income will he now pay in tax on his $150 bill? Show your work!! 38. Will he make adjustments to his purchases and if yes, how will he adjust? If no, why not? 39. If the sales tax increases to 12%, what percentage of leff's income will he now pay in tax on
Part II: Impact of a Sales Tax Increase Archie Windsor is a 19 year old college student at the University of Washington in Seattle. He works at Royal Foods earning $10.25/hour and his salary is used to purchase mostly goods and services such as food and basic day to day items. Also, to save money, he does not own a car but relies on campus transportation and the local area transit system to travel. Most of his food items are purchased at his job for convenience. Archie estimates 45% of his income is spent on food and basic items. Jeff Gates is a 60 year old CEO of a major corporation and lives in Medina, Washington. His hourly salary is roughly estimated to be $4400. He purchases food, basic day to day items as well as various luxury goods. Jeff hates shopping so relies on grocery delivery services for most of his food purchases. However, he does like to attend local farmers markets and artisanal grocery stores for his favorite specialty items. He estimates 15% of his income is spent on food and basic items. The current sales tax is 10% for the city of Seattle. This means that each time Archie and Jeff purchase $150 worth of food and basic items, they must also pay $15 in sales tax. 34. $15 represents how much of Archie's hourly income? Show your work!! 35. $15 represents how much of Jeff's hourly income? Show your work!! 36. Who does the sales tax impact more? Why? 37. If the sales tax increases to 12%, what percentage of Archie's income will he now pay in tax on his $150 bill? Show your work!! 38. Will he make adjustments to his purchases and if yes, how will he adjust? If no, why not? 39. If the sales tax increases to 12%, what percentage of leff's income will he now pay in tax on
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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I need help with question 34 -38 if you can
Transcribed Image Text:Part II: Impact of a Sales Tax Increase
Archie Windsor is a 19 year old college student at the University of Washington in Seattle. He works
at Royal Foods earning $10.25/hour and his salary is used to purchase mostly goods and services
such as food and basic day to day items. Also, to save money, he does not own a car but relies on
campus transportation and the local area transit system to travel. Most of his food items are
purchased at his job for convenience. Archie estimates 45% of his income is spent on food and basic
items.
Jeff Gates is a 60 year old CEO of a major corporation and lives in Medina, Washington. His hourly
salary is roughly estimated to be $4400. He purchases food, basic day to day items as well as
various luxury goods. Jeff hates shopping so relies on grocery delivery services for most of his food
purchases. However, he does like to attend local farmers markets and artisanal grocery stores for
his favorite specialty items. He estimates 15% of his income is spent on food and basic items.
The current sales tax is 10% for the city of Seattle. This means that each time Archie and Jeff
purchase $150 worth of food and basic items, they must also pay $15 in sales tax.
34. $15 represents how much of Archie's hourly income? Show your work!!
35. $15 represents how much of Jeff's hourly income? Show your work!!
36. Who does the sales tax impact more? Why?
37. If the sales tax increases to 12%, what percentage of Archie's income will he now pay in tax
on his $150 bill? Show your work!!
38. Will he make adjustments to his purchases and if yes, how will he adjust? If no, why not?
39. If the sales tax increases to 12%, what percentage of leff's income will he now pay in tax on
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