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Question: sanborn motors is a small car dealership on average it...

Question details

Sanborn Motors is a small car dealership. On average, it sells a car for $29,000, which it purchases from the manufacturer for $25,000. Each month, Sanborn Motors pays $59,800 in rent and utilities and $72,000 for salespeople's salaries. In addition to their salaries, salespeople are paid a commission of $800 for each car they sell. Sanborn Motors also spends $9,000 each month for local advertisements. Its tax rate is 40%.  

Requirement 1

How many cars must Sanborn Motors sell each month to break even?

Requirement 2

Sanborn Morots has a target monthly net income of $57,600. What is the targeted monthly operating income? How many cars must be sold each month to reach the target monthly net income of $57,600?

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