The Wall Street Journal reported on January 26, 2010, that Ford Motor Co. was going to announce the addition of a second shift at its Chicago plant that would create 1,200 jobs. However, under a new union agreement that allows a two-tiered wage system, as many as 600 of these workers will earn an average of $14/hour, which is about half of the current new hire wage.

• What effect will this new lower wage rate have on Fords contribution margin?
• How will it affect Fords break-even point?