A retail chain sells two products: Product X with a selling price of $40/unit and variable cost of $20/unit, and Product Y with a selling price of $60/unit and variable cost of $30/unit. Fixed costs are $150,000.

• Requirements:
  • Calculate the contribution margin per unit and contribution margin ratio for each product.
  • Determine the break-even point in units and sales dollars for each product.
  • Perform a sensitivity analysis assuming a 10% decrease in variable costs for Product X.
  • Recommend pricing strategies to maximize overall profitability.