ORelly Motors is a small car dealership, On average, it sells a car for $28,000, which it purchases from the manufacturer for $24,000, Each month, O'Reilly Motors pays $50,400 in rent and utilities and $68,000 for salespeople's salaries. In addition to their salaries, salespeople are paid a commission of $400 for each car they sell, O'Reilly Motors also spends $13,500 each month for local advertisements. Its tax rate is 40%. Read the requirements Lets begin by determining the formula for the breakeven number of cars. Breakeven number of cars Fixed costs Contribution margin per unit O'Reily Motors must sell 33 each month to break even. Requirement 2. O'Reilly Motors has a target monthly net income of $69,120. What is its targeted monthly operating income? How many cars must be sold each month to reach the target monthly net income of $69,120? Determine the formula to calculate the target operating income. Target Targeted net income /( Tax rate ) operating income The target monthly operating income is 115200 Finally determine the formula to calculate the number of cars that are required to be sold. +[ Quantity of cars required to be sold Foxed costs Targetoperatingincom. )/ Contribution margin per unit They would need to sell 89 cars to reach the target monthly income of $69,120