A retail company sells two products: Product X with a selling price of $50/unit and variable cost of $30/unit, and Product Y with a selling price of $80/unit and variable cost of $50/unit. Fixed costs are $200,000.

• 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 the company as a whole.
  • Perform a sensitivity analysis assuming a 10% increase in selling price for Product X.
  • Recommend pricing and product mix strategies to maximize profitability.
  • Discuss how CVP analysis aids in decision-making for pricing and production planning.