Perform a cost-volume-profit analysis for Facebook, Inc. to assess the impact of changes in sales volume on its profitability. Calculate the breakeven point in units and dollars, contribution margin ratio, and margin of safety. Discuss the significance of CVP analysis in managerial decision-making and strategic planning for Facebook.
Values:
•Fixed Costs: $2,000,000
•Variable Cost per Unit: $20
•Selling Price per Unit: $50