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Consider the following cost structure for Ford Motor Company for the year 2023: Item Amount ($) Fixed Costs 500,000 Variable Cost per Unit 20 Selling

Consider the following cost structure for Ford Motor Company for the year 2023:

Item

Amount ($)

Fixed Costs

500,000

Variable Cost per Unit

20

Selling Price per Unit

50

Requirements:

  1. Calculate the Break-even Point in units.
  2. Determine the Break-even Point in dollars.
  3. Compute the Margin of Safety if actual sales are 30,000 units.
  4. Analyze the impact of a 10% increase in fixed costs on the break-even point.
  5. Evaluate the effect of a 5% decrease in variable cost per unit on the break-even point.

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