Cost Behavior Analysis at Facebook

• Values:
  • Fixed Costs: $500,000
  • Variable Costs per Unit: $20
  • Sales Price per Unit: $50
• Requirements:

1. Calculate the breakeven point in units and dollars.
2. Determine the margin of safety in sales dollars.
3. Analyze how a 10% increase in fixed costs would affect the breakeven point.
4. Recommend pricing strategies to maximize profitability for Facebook.