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Part $2$ of $6$

Bailey Motors is a small car dealership. On average it sells a car for $$33,000,$ which it purchases from the manufacturer for $$29,000.$ Each month, Bailey Motors pays $$64,000$ in rent and utilities and $$7,4,000$ for salespeople's salaries. In addition to their salaries, salespeople are paid a commis ion of $$6$ for forch car they sell. Bailey Motors also spends $$15,000$ each month for local advertisements. Its tax rate is $40\%.$

Required

How many cars must Eailey Motors sell each month to break ever?

Bailey Motors has a target monthly net income of $$72,000.$ What is its target operating income? How many cars each month to reach the target monthly net income of $$72,000?$

Requirement $1.$ How many cars must Bailey Motors sell each month to break even?

Let's begin by determining the formula for the breakeven number of cars.

Ereakeven $=$

number $of$ cars $=$ Contribution margin per unit

Bailey Motors must sell $$ cars each month to break even. $($Round the number of cars up to the nearest whale number:$)$

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