Ecocars manufactures a new ultra-sporty electric vehicles, Ask an Expert

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EcoCars manufactures a new ultra-sporty electric vehicles targeted to MBAs and other higher-earning professionals. EcoCars' management has asked you to help the firm identify its EBDAT breakeven level. The company has only one product, the eBolt. The firm's cars sell for $52,000 each (all production is outsourced to an external manufacturer). Each car costs $44,200 in materials and manufacturing costs. The firm's office lease in Silicon Valley is $1.2 million annually. Its marketing and advertising expense is $2.5 million per year, and salaries and insurance run $2.3 million annually.

Part 1: Calculate the firm's

1) EBDAT revenue, and

2) contribution profit margin at EBDAT breakeven.

Part 2: If the firm sells 575 vehicles, what will be its

3) gross profit percentage,

4) operating income, and

5) operating income percentage?

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