Bert Faces a Progressive Tax Structure That Has the Following

question 179

Multiple Choice

Bert faces a progressive tax structure that has the following marginal tax rates: 0 percent on the first $10,000, 10 percent on the next $10,000, 15 percent on the next $10,000, 25 percent on the next $10,000, and 50 percent on all additional income. If Bert earns $75,000, what is his average tax rate?

• A)20 percent
• B)25 percent
• C)30 percent
• D)36.67 percent

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Definitions:

Variable Cost

Costs that change in proportion to the level of production or sales volume.

Net Operating Income

A company's total income from its operations, excluding taxes and interest.

Monthly Sales

The total revenue generated from sales activities during a specific month.

Target Profit

The specific amount of profit a company aims to achieve within a specific period.