Eastside Motors is a small car dealership. On average, it sells a car for $31,000 which it purchases from the manufacture for $27,000. Each month, Eastside Motors pays $51,600 in rent and utlities and $73,000 for salespeople's salaries. In addition to their salaries, salespeople are paid a commission of $600 for each car they sell. Eastside also spends $8,000 each month for local advertisements. It's tax rate is 40%.

Requirement 1. How many cars must Eastside Motors sell each month to break even? Let's begin by determining the formula for the breakeven number of cars. Breakeven number of cars Fixed costs Contribution margin per unit Eastside Motors must sell each month to break even Requirements 1. How many cars must Eastside Motors sell each month to break even? 2. Eastside Motors has a target monthly net income of $65,280. What is its targeted monthly operating income? How many cars must be sold each month to reach the target monthly net income of $65,280? Print Done