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?

Question

Quizplus · Accepted Answer

To calculate the average tax rate, we need to find the total tax liability:
$0-$50,000: 15% = $7,500
$50,001-$75,000: 25% = $6,250
$75,001-$100,000: 34% = $6,800
$100,001-$335,000: 39% = $61,400
Total tax liability = $81,950
Average tax rate = Total tax liability / Taxable income = $81,950 / $200,000 = 0.40975 or 40.975%
Therefore, the closest answer is B, which is 30.63%.

Boyer Enterprises Had $200,000 in 2011 Taxable Income