Leah opened up her own real estate agency. The agency’s commission for each sold property was 5%. In order to meet all of her overhead costs she calculated that for each house that sold at $150,000.00 it would take 23.2% of the commission the agency received to cover her expenses so long as she sold 6 houses each month. If Leah sold 6 houses in a month, what would be the agency’s net profit for that month?

A profit is the gain you receive on an investment you make.  This includes interest earned on a savings account.  However, in business, a profit is the amount made above and beyond what it cost you to buy a product (unit cost).  For example, if you buy pens to sell and you buy 50 pens for $5.00 each and then you sell each pen for $12.00, when you sell a pen for $12.00 you then subtract your cost of $5.00 leaving you a profit of $7.00 (also referred to as the gross profit). From the gross profit you must then subtract your overhead expenses (or operating expenses) leaving you a net profit.... Show more

A profit is the gain you receive on an investment you make.  This includes interest earned on a savings account.  However, in business, a profit is the amount made above and beyond what it cost you to buy a product (unit cost).  For example, if you buy pens to sell and you buy 50 pens for $5.00 each and then you sell each pen for $12.00, when you sell a pen for $12.00 you then subtract your cost of $5.00 leaving you a profit of $7.00 (also referred to as the gross profit).

From the gross profit you must then subtract your overhead expenses (or operating expenses) leaving you a net profit.  In order for a business to survive it must have a continuous net profit and very little net loss (when the overhead expenses are greater than the gross profit).

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