Laundry- detergent $7.99 T Flower- bouquet $3.99 T, A grocery store receipt shows 5% state tax due on laundry detergent and a flower bouquet. Does it matter whether the tax is calculated on each separate item or the total cost? Explain.
7.99 * 0.05 = 0.3995 = $0.40 tax
3.99 * 0.05 = 0.1995 = $0.20 tax
____________________ = $0.60 total tax
0.05(7.99 + 3.99) = 0.599 = $0.60 total tax
In this case, the question is whether it matters whether the tax is calculated on each separate item or the total cost. To answer this question, we need to consider how the tax is calculated and its implications.
If the tax is calculated on each separate item, it means that the tax rate applies individually to the price of the laundry detergent and the flower bouquet. So, for a $7.99 detergent, the tax would be 5% of $7.99, which is $0.40. Similarly, for a $3.99 flower bouquet, the tax would be 5% of $3.99, which is $0.20. Therefore, the total tax for both items would be $0.40 + $0.20 = $0.60.
On the other hand, if the tax is calculated on the total cost, it means that the tax rate applies to the combined price of the detergent and the flower bouquet. In this case, the total cost would be $7.99 + $3.99 = $11.98. The tax would then be 5% of $11.98, which is approximately $0.60.
Whether the tax is calculated on each separate item or the total cost depends on the tax policy of the particular jurisdiction. From a practical standpoint, however, the difference between the two methods may not be significant in this specific scenario. In this case, the difference in tax amount is only $0.60, which is a small sum. Therefore, it may not have a substantial impact on the final cost for the consumer.
To fully answer the question of whether it matters, it would be important to consider the specific tax laws and regulations in the relevant jurisdiction. Additionally, it would also be useful to understand the purpose of the tax and how it is intended to be applied.