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Scotor manufactures and sells one product, an electric scooter popular with college students. Five models are avalable but each model is sold for the same
Scotor manufactures and sells one product, an electric scooter popular with college students. Five models are avalable but each model is sold for the same price and has equivalent costs. Each scooter sell for $8.000 and the variables costs ae $2.600 per unit. Fixed manufacturing costs consist of $3,600,000 and fuxed marketing costs of $1.600,000 Budgeted sales for this coming year are 1,200 scooters. Management's profit goal for the coming year is operating income of $1.800.000 lynore income taves A What is the breakeven in dollars? B. What is the margin of safety ratio? C What is the number of units the Scotor must sell to achieve its profit goal? D. The company is considening a new cost struvcture where a significant portion of the manufacturing s ausourced increasing the variable costs by $1.650 per scooter. Management able to restcr the fued manufacturing costs by 60% as a result What is the impact of the new strategy on operating income? Should the company adopt the new strategy? Why or why ngt?
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