For its fleet of trucks, Overland Transport, Inc., purchased 580 tires rated at 50 pounds each. The tires had a retail price of $85 each. The sales tax in 4.5%, and the federal excise tax is $0.15 per pound.
A. What are the amount of sales tax per tire and the total sales tax?
B. What are the amount of federal excise tax per tire and the total excise tax?
C. What is the total purchase price of the tires>
A. To calculate the amount of sales tax per tire, we multiply the retail price ($85) by the sales tax rate (4.5%):
Sales tax per tire = $85 * 0.045 = $3.825
To find the total sales tax, we multiply the sales tax per tire by the number of tires (580):
Total sales tax = $3.825 * 580 = $2,213.50
B. To calculate the amount of federal excise tax per tire, we multiply the weight of each tire (50 pounds) by the federal excise tax rate ($0.15):
Excise tax per tire = 50 pounds * $0.15/pound = $7.50
To find the total excise tax, we multiply the excise tax per tire by the number of tires (580):
Total excise tax = $7.50 * 580 = $4,350
C. The total purchase price of the tires is equal to the sum of the retail price, sales tax, and excise tax:
Total purchase price = (580 tires * $85/tire) + $2,213.50 + $4,350
To calculate the amount of sales tax per tire, we need to multiply the retail price of each tire by the sales tax rate.
A. Sales tax per tire:
Sales tax rate = 4.5% = 0.045 (decimal form)
Retail price of each tire = $85
Amount of sales tax per tire = $85 x 0.045 = $3.825
To calculate the total sales tax, we multiply the sales tax per tire by the total number of tires.
Total sales tax = $3.825 x 580 = $2,215.50
Now, let's calculate the amount of federal excise tax per tire. The federal excise tax is given as $0.15 per pound of each tire.
B. Federal excise tax per tire:
Weight of each tire = 50 pounds
Federal excise tax per pound = $0.15
Amount of federal excise tax per tire = $0.15 x 50 = $7.50
To find the total excise tax, we multiply the federal excise tax per tire by the total number of tires.
Total excise tax = $7.50 x 580 = $4,350
Finally, let's calculate the total purchase price of the tires by adding the retail price, sales tax, and excise tax.
C. Total purchase price of the tires:
Retail price per tire = $85
Total number of tires = 580
Total purchase price of the tires = ($85 + $3.825 + $7.50) x 580 = ($96.325) x 580 = $55,912.50