Sales tax, Tips, and Markup

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 purchase price by the sales tax rate (as a decimal). For example, for a $100 item with a 5% tax rate: $100 x 0.05 = $5.

Front

What is the total cost including sales tax?

Back

Total cost = Purchase price + Sales tax.

Front

If an item costs $50 and the sales tax is 8%, what is the total cost?

Back

Total cost = $50 + ($50 x 0.08) = $54.

Front

What is a tip?

Back

A tip is a small amount of money given to someone for their service, usually calculated as a percentage of the total bill.

Front

How do you calculate a tip?

Back

To calculate a tip, multiply the total bill by the tip percentage (as a decimal). For example, for a $30 bill with a 15% tip: $30 x 0.15 = $4.50.

Front

What is markup?

Back

Markup is the amount added to the cost price of goods to cover overhead and profit.

Front

How do you calculate markup?

Back

Markup = Selling price - Cost price.

Front

If a shirt costs $20 and is sold for $30, what is the markup?

Back

Markup = $30 - $20 = $10.

Front

What is the formula for calculating the final price after markup?

Back

Final price = Cost price + Markup.