-Refer to Exhibit 11-5 which summarizes the situation prior to the value added tax (VAT).If the government imposes a VAT rate of 10 percent,the baker must pay ___________ in VAT tax and will need to raise the price he charges the final consumer to _______________.
A) $0.06; $2.25
B) $0.11; $2.75
C) $0.25; $2.75
D) $0.60; $2.57

Question

-Refer to Exhibit 11-5 which summarizes the situation prior to the value added tax (VAT).If the government imposes a VAT rate of 10 percent,the baker must pay ___________ in VAT tax and will need to raise the price he charges the final consumer to _______________.
A) $0.06; $2.25 
B) $0.11; $2.75 
C) $0.25; $2.75 
D) $0.60; $2.57

Quizplus · Accepted Answer

The baker must pay $0.11 in VAT tax and will need to raise the price he charges the final consumer to $2.75.

-Refer to Exhibit 11-5 Which Summarizes the Situation Prior to the Value