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