Tax, Tip, Markup Practice

Front

What is sales tax?

Back

Sales tax is a percentage of the purchase price added to the cost of goods and services, collected by the seller and paid to the government.

Front

How do you calculate sales tax?

Back

To calculate sales tax, multiply the cost of the item by the sales tax rate (as a decimal). For example, for a $100 item with a 9% tax, the tax is $100 x 0.09 = $9.

Front

What is a markup?

Back

Markup is the amount added to the cost price of goods to cover overhead and profit. It is usually expressed as a percentage of the cost.

Front

How do you calculate the selling price with markup?

Back

To find the selling price, add the markup amount to the cost price. Selling Price = Cost Price + (Cost Price x Markup Percentage).

Front

If an item costs $50 and has a 20% markup, what is the selling price?

Back

Selling Price = $50 + ($50 x 0.20) = $50 + $10 = $60.

Front

What is the formula for calculating sales tax?

Back

Sales Tax = Cost of Item x Sales Tax Rate.

Front

If a shirt costs $15 and the sales tax is 8%, how much is the total cost?

Back

Total Cost = Cost of Shirt + Sales Tax = $15 + ($15 x 0.08) = $15 + $1.20 = $16.20.

Front

What is the difference between sales tax and markup?

Back

Sales tax is a government-imposed charge on sales, while markup is the seller's added cost to determine the selling price.

Front

If a store has a 25% markup on a product that costs $40, what is the selling price?

Back

Selling Price = $40 + ($40 x 0.25) = $40 + $10 = $50.

Front

How do you find the amount of sales tax paid on an item?

Back

To find the sales tax amount, multiply the item's price by the sales tax rate.