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 $1,600,000 Budgeted sales for this coming year are 1,200 scooters. Management's profit goal for the coming year is operating income of 1,800,000$ ignore income taxes

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 structure where a significant portion of the manufacturing is outsourced increasing the variable costs by 1,650$ per scooter. Management believes the company will be able to reduce the fixed 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 not?