Question
Motors is a small car dealership. On average, it sells a car for $27,000, which it purchases from the manufacturer for $23,000. Each month, Garrett
Motors is a small car dealership. On average, it sells a car for
$27,000,
which it purchases from the manufacturer for
$23,000.
Each month,
Garrett
Motors pays
$48,200
in rent and utilities and
$68,000
for salespeople's salaries. In addition to their salaries, salespeople are paid a commission of
$600
for each car they sell.
Garrett
Motors also spends
$13,000
each month for local advertisements. Its tax rate is
40%.
Read the requirements
How many cars must Garrett Motors sell each month to break even? | |
2. | Garrett Motors has a target monthly net income of$51,000. What is its targeted monthly operating income? How many cars must be sold each month to reach the target monthly net income of$51,000? |
How many cars must
Garrett
Motors sell each month to break even?
Let's begin by determining the formula for the breakeven number of cars.
| Breakeven number of cars | = |
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