Question

LV Beethoven Software supplies customized software to a managed healthcare system. LV Beethoven Software's costs for the software is $1,723,000. LV Beethoven Software sells the software to the healthcare system for $3,816,981.10. Overhead expenses are estimated at 47% of the selling price. What is LV Beethoven Software's net profit to the nearest dollar?

Answer 1

LV Beethoven Software's net profit is $300000.

Explanation:

L V Beethoven Software's cost price = $1723000 and selling price = $3816981.10

Since overhead expenses are estimated at 47% of the selling price then overhead expenses will be = selling price × 47%

= selling price ×
`(47)/(100)`

= 3816981.1 × 0.47 = $1793981.117

And we know net profit = selling price - (cost price + overhead expenses)

= 3816981.10 - (1723000+1793981.12)

= 3816981.1 - 3516981.12

= 299999.983 ≅ $300000.00

Hence net profit of L V Beethoven Software is $300000.