Answer Happy

Cathy's Computer Software Company sells computer software to large medical offices that helps them with their patient records and billing. Your marketing department has provided the following information: The total market for software of this type is 2,000 units per year. The average price per unit for the software package is $5,000 The average costs associated with the software production include: • $1,000 per unit licensing fee for the software • $250 per unit production/packaging/miscellaneous costs • $20,000 per month office/warehouse lease $10,000 per month promotional marketing materials • In addition, you currently have three salespeople who work for you selling and installing software packages. The associated selling expenses are as follows: o $3,000 per month salary for each salesperson $2,500 per month expense budget for each salesperson (travel, entertainment, etc.) • $1,000 per unit training and installation service expenses o 5% commission rate based on sales