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.

Question

Answered

Verified Answer :

ButtersLeopoldStotch ButtersLeopoldStotch · Answer 1 · 2014-10-02T19:58:11-04:00

If the receipt shows both items it does matter, if you simply calculate each its like your putting 10% tax on it.

Answer Link

chisnau chisnau · Answer 2 · 2019-05-24T11:33:07-04:00

It does not matter whether the tax is calculated on each separate item or the total cost.

Lets check both the conditions by taking 2 items.

Lets suppose a person buys laundry detergent for $4.50 and flower bouquet for $5.25

Condition 1: If 5% tax is deducted separately on both items:

Cost of laundry detergent becomes after tax = $0.05\times4.50=0.225$

= $4.50-0.225=4.275$

Cost of flower bouquet becomes = $0.05\times5.25=0.2625$

= $5.25-0.2625=4.9875$

So, total tax deducted is = $0.225+0.2625$= $0.4875

Condition 2: If tax is deducted on whole amount.

Cost of both the items = @@MATH_TOKEN_5@@ =$9.75

5% tax on 9.75 is = $0.05\times9.75$ = $0.4875

Hence, we can see that in both the conditions the tax is same that is $0.4875

So, it does not matter whether the tax is calculated on each separate item or the total cost. The tax remains the same.