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A company manufactures and sells two products, Product X and Product Y. The following information is available for the year: Sales revenue $300,000 (Product X)
A company manufactures and sells two products, Product X and Product Y. The following information is available for the year: Sales revenue $300,000 (Product X) and $200,000 (Product Y), Variable costs $100,000 (Product X) and $80,000 (Product Y), Fixed costs $50,000 (Product X) and $30,000 (Product Y). Calculate the contribution margin ratio and the contribution margin per unit for each product. Discuss how these metrics can help in assessing product profitability and making pricing decisions.
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