Advanced Coding is a software development company that sells specialized practice management software to large professional services firms. Management has decided to analyze certain costs related to sales to determine per-customer profitability and to plan for future sales efforts. These costs include sales commissions and overhead related to the corporate jet expenses. They have determined that $200,000 of overhead costs related to the corporate jet should be assigned to individual customers.
Sales representatives are paid a commission of 5% on Gross Profit (sales less costs to develop the software). In relation to overhead costs, the sales staff used the corporate jet at a cost of $1,000 per hour for trips to customers as follows:
Gross profit per customer is as follows:
(NOTE: Do not round amounts until final calculation of customer profitability, then round to the nearest dollar).
Which customer is the most profitable?
A) Customer #1
B) Customer #2
C) Customer #3
D) Customer #4
E) Customer #5

Question

Advanced Coding is a software development company that sells specialized practice management software to large professional services firms. Management has decided to analyze certain costs related to sales to determine per-customer profitability and to plan for future sales efforts. These costs include sales commissions and overhead related to the corporate jet expenses. They have determined that $200,000 of overhead costs related to the corporate jet should be assigned to individual customers.
Sales representatives are paid a commission of 5% on Gross Profit (sales less costs to develop the software). In relation to overhead costs, the sales staff used the corporate jet at a cost of $1,000 per hour for trips to customers as follows:
 Gross profit per customer is as follows:
 (NOTE: Do not round amounts until final calculation of customer profitability, then round to the nearest dollar).
Which customer is the most profitable?
A) Customer #1 
B) Customer #2 
C) Customer #3 
D) Customer #4 
E) Customer #5

Quizplus · Accepted Answer

The Answer is A

Advanced Coding Is a Software Development Company That Sells Specialized