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Breakeven problems Knight Motors is a small car dealership. On average it sells a car for $32,000, which it purchases from the manufacturer for $28,000.
Breakeven problems
Knight Motors is a small car dealership. On average it sells a car for $32,000, which it purchases from the manufacturer for $28,000. Each month, Knight Motors pays $68,000 in rent and utilities and $78,000 for salespeople's salaries. In addition to their salaries, salespeople are paid a commission of $500 for each car they sell. Knight Motors also spends $16,000 each month for local advertisements. Its tax rate is 40%. Required 1. How many cars must Knight Motors sell each month to break even? 2. Knight Motors has a target monthly net income of $72,000. What is its target operating income? How many cars mus each month to reach the target monthly net income of $72,000 ? Requirement 1. How many cars must Knight Motors sell each month to break even? Let's begin by determining the formula for the breakeven number of cars. Breakeven number of cars Knight Motors must sell cars each month to break even. (Round the number of cars up to the nearest whole number.)
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