Section 9.1 – Calculations Related to Business
Terminology:
Profit:
Income:
Overhead:
Overhead:
Base Profit = ____________________________________ + ____________________________________
Note:
Current Percentage of Profit =
100
Desired Percentage of Profit:
Formulas:
overall cost × desired percent profit = desired amount of profit
overhead + desired amount of profit = desired income goal
Net Profit:
Net Profit:
Overall Cost:
Selling Price:
Formulas:
pharmacy’s purchase price + cost to dispense = overall cost
(overall cost × desired percent profit) + overall cost = selling price
selling price – overall cost = net profit/ net profit = income – costs
100
percent of profit
cost per tablet = pharmacy cost/count
cost per tablet × amount dispensed = overall cost of prescription
Gross Profit, Net Profit, and Markup Rate:
Purchase Price:
Gross Profit:
Mark-up:
Profit Margin:
Wholesaler:
Markup Rate =
100
Flat Rate:
Formulas:
selling price – pharmacy’s purchase price = gross profit/markup amount
Discount:
Discount:
Discount Rate =
100
Formulas:
regular selling price × discount rate = discount amount
regular selling price – discount amount = discounted selling price
Ex 1: The Drugs-R-Us Pharmacy has the following overhead expenses. Use this information
to answer the questions:
Pharmacist(s) salary
Techninican(s) salary
Rent
Utilities
Computer maintenance
Software subscriptions
Liability insurance
Business insurance
Drug purchases
$135,000.00
52,000.00
23,000.00
6,000.00
4,000.00
2,000.00
4,000.00
4,000.00
750,000.00
a. If an 22% profit is desirable, what must the pharmacy’s income be in order to meet
this goal?
b. If the pharmacy’s income is $1,340,628.00, what is its percent profit?
c. If the pharmacy’s income is $1,057,893.00, what is its percent profit?
Ex 2: Calculate the net profit and the percent profit (markup rate) for the following:
The dispensing fee is $3.85 for each prescription (round to whole percents).
(a) Alprazolam 1 mg, purchase price- $4.90 per 100 caps
Dispense- 30 caps, Rx Charge- $8.99
(b) Relafen 500 mg, purchase price- $88.88 per 500 tabs
Dispense- 100 tabs, Rx Charge- $29.85
(c) Cough-syrup, purchase price- $42.50 per pint (480mL)
Dispense- 8 fl oz bottle, Rx Charge- $27.46
Ex 3: The pharmacy is selling the following items at a discount this week. Calculate the
discounted selling price for each: (round to the nearest dollar amount, i.e. the hundredths)
(a) Cough syrup, regular selling price $5.65 discounted 17%
(b) Baby shampoo, regular price $3.99 discounted 25%
Ex 4: Calculate the following and state the answer in dollar or percent:
(a) Antiviral ointment costs a pharmacy $16.75 per tube. The standard markup is 30%.
What is the total selling price of a box of 12 tubes?
(b) Identify the markup and the selling price of an oral antibiotic suspension that costs
the pharmacist $12.30 per bottle if the markup rate is 25%.
(c) The pharmacy purchased a case of eardrops from the manufacturer for $112.80. The
case comes with 40 individual bottles. The pharmacy’s desired markup is $2.13.
a) What is the price per bottle to the pharmacy?
b) Find the selling price per bottle.
(d) A medication that costs the pharmacy $712.00 for 1000 tablets and sells for $563.00.
a) Calculate the gross profit for the medication
b) If the cost of dispensing this same medication is $2.35 per 100 tablets, calculate
the net profit for selling 1 tablet (we need 3 pieces of information here!).