The Murphys’ gross annual family income is $120,500. Mr. Murphy referred to the graph shown below and calculated that his family will spend $28,920 on taxes this year. What is wrong with Mr. Murphy’s calculation?
A circle graph titled Murphy's Annual Expenses. Federal taxes, 24 percent; State/local taxes, 10 percent; Housing and household, 27 percent; Food, 7 percent; Medical care, 5 percent; Transportation, 9 percent; Recreation, 4 percent; Clothing, 5 percent; Other, 9 percent.
a.
He has calculated only federal taxes.
b.
He has calculated only state taxes.
c.
He does not need to include federal taxes.
d.
He does not need to include state taxes.
a. He has calculated only federal taxes.
The correct answer is a. Mr. Murphy has calculated only federal taxes.
From the information given in the question, it is stated that Mr. Murphy calculated that his family will spend $28,920 on taxes this year. However, the graph provided shows that federal taxes account for 24 percent and state/local taxes account for 10 percent of the annual expenses. Therefore, Mr. Murphy's calculation does not include state/local taxes, which means he has only considered federal taxes in his calculation.