Westover 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, Westover Motors pays $69,000 in rent and utilities and $79,000 for salespeople's salaries.In addition to their salaries, salespeople are paid a commission of $900 for each car they sell. Westover Motors also spends $16,000 each month for local advertiser

ments. Its tax rate is 40%.

Required

1. How many cars must Westover Motors sell each month to break even ?
2. Westover Motors has a target monthly net income of $72.000. What is its target operatina income? How man cars must be sold each month to reach me target monthly net income of $72,000?

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

Lets begin ov determining the formula for the breakeven number of cars.

Breakeven number of cars = Total fixed costs / Contribution margin per unit

Westover Motors must sell __ cars each month to break even. (Round the number of cars up to the nearest whole number.)

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