Question

The Business Services Department ordered a chair for $172.50. Upon arrival, they received an invoice for $214.47.

If an 8.2% sales tax rate is charged on the purchase, which of the following is closest to the cost of shipping and handling?

A. $13.67

B. $14.15

C. $17.59

D. $27.82

Answer 1

The tax rate is applied on the sales tax exclusive purchase amount which is $172.5, to calculate sales tax.

Sales tax on purchase of $172.5= $172.5*8.2%=$14.145

So the total cost of the product =$14.145+$172.5=$186.645

Now the difference between the invoice amount and the total cost of the product is cost of shipping and handling.

cost of shipping and handling=214.47-186.645=$27.825

So the option D is correct.