Chapter 19, Problem 1ECP

To determine

The sales tax, excise tax and total price including taxes.

Answer to Problem 1ECP

The sales tax and excise tax are $\underset{\_}{\$45\text{ and \$75}}$ respectively.

The total price including taxes is $\underset{\_}{\$870}$.

Explanation of Solution

Given:

The retail selling price is $750.

The sales tax and excise tax rates are 6% and 10% respectively.

Calculation:

Since the sales tax rate is 6%, the sales tax is $\$750\times 6\%=\$45$.

Since the excise tax rate is 10%, the sales tax is $\$750\times 10\%=\$75$.

Therefore, the sales tax and excise tax are $\underset{\_}{\$45\text{ and \$75}}$ respectively.

So, the total price including taxes is $\$750+\$45+\$75=\$870$.

Thus, the total price including taxes is $\underset{\_}{\$870}$.

Check:

$\begin{array}{l}100\%\text{ base}+6\%\text{ sales tax}+10\%\text{ excise tax}=116\%\\ 1.16\times \$750=\$870\end{array}$

Thus, the obtained answer is correct.