How many Fisker Karma Sedans must a Sanger dealership sell to breakeven in its first year? Show your work. What is the likelihood of this happening? Explain.
According to the case, the fixed cost and upfront investment are listed below:
Fixed cost overhead for showroom and service bay - $85,000
Two full-time sales associates - $79,500
Sales associates’ commission, 1% of retail sales
Service manager and service bay technician - $90,250
Advertising, promotion, & PR - $66,000
Delivered cost, 90% of MSRP
Fisker Karma Sedan average MSRP - $102,500
Upfront investment - $200,000, to be paid back to investor over 5 year