Oakdale Fashions Inc. had $255,000 in 2011 taxable income. If the firm paid $82,100 in taxes, what is the firm's average tax rate?

Name: Oakdale Fashions Inc. had $255,000 in 2011 taxable income. If the firm paid $82,100 in taxes, what is the firm's average tax rate?
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Question

Quizplus · Accepted Answer

The average tax rate can be calculated by dividing the total taxes paid by the taxable income. 
Average tax rate = Taxes paid / Taxable income 
= $82,100 / $255,000 
= 0.3220 or 32.20% 
Therefore, option B is the correct answer.