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Ford Motor Company is evaluating the profitability of its vehicle models and needs to conduct a CVP analysis to guide decision-making. The cost accountant gathered
Ford Motor Company is evaluating the profitability of its vehicle models and needs to conduct a CVP analysis to guide decision-making. The cost accountant gathered data on variable costs, fixed costs, selling price per unit, and projected sales volume for each vehicle model. The data for the Mustang, Fusion, and Explorer are as follows:
Mustang:
- Variable Cost per Unit: $20,000
- Fixed Costs: $2,000,000
- Selling Price per Unit: $40,000
- Projected Sales Volume: 50,000 units
Fusion:
- Variable Cost per Unit: $15,000
- Fixed Costs: $1,500,000
- Selling Price per Unit: $30,000
- Projected Sales Volume: 80,000 units
Explorer:
- Variable Cost per Unit: $25,000
- Fixed Costs: $2,500,000
- Selling Price per Unit: $50,000
- Projected Sales Volume: 60,000 units
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