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?