1. Company: Ford

Scenario: Auto Parts Manufacturing Cost Analysis

Data:

• Fixed Manufacturing Costs: $800,000
• Variable Manufacturing Costs per Part: $50
• Parts Produced: 10,000

Requirements:

1. Calculate the total manufacturing costs.
2. Determine the cost per part.
3. Analyze the effect of producing 2,000 more parts on total and per-part costs.
4. Discuss the importance of understanding fixed and variable costs in production planning.
5. Recommend strategies to manage production costs effectively.
6. Evaluate the potential cost savings from outsourcing part of the production.