Question

Motors is a small car dealership. On​ average, it sells a car for $27,000​, which it...

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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