Boyer Enterprises had $200,000 in 2011 taxable income.What is the firm's average tax rate based on the rates shown in the following table? $$\begin{array} { l c }
\text { Taxable income } & \text { Tax rate } \
\$ 0 - 50,000 & 15 \% \
50,001 - 75,000 & 25 \% \
75,001 - 100,000 & 34 \% \
101,000 - 335,000 & 39 \%
\end{array}$$

Question

Boyer Enterprises had $200,000 in 2011 taxable income.What is the firm's average tax rate based on the rates shown in the following table? $$\begin{array} { l c } 
\text { Taxable income } & \text { Tax rate } \
\$ 0 - 50,000 & 15 \% \
50,001 - 75,000 & 25 \% \
75,001 - 100,000 & 34 \% \
101,000 - 335,000 & 39 \%
\end{array}$$

Quizplus · Accepted Answer

Tax = .15($50,000) + .25($25,000) + .34($25,000) + .39($200,000 - $100,000) = $61,250Average tax rate = $61,250/$200,000 = 30.63 percent

Boyer Enterprises Had $200,000 in 2011 Taxable Income A)2825 Percent B)30

Boyer Enterprises Had $200,000 in 2011 Taxable Income A)2825 Percent
B)30