Company: Nu Electronics Ltd.

Scenario: Product Profitability Analysis

• Product Details:
  • Product A:
    • Selling Price per Unit: $150
    • Variable Cost per Unit: $100
• Product B:
  • Selling Price per Unit: $200
  • Variable Cost per Unit: $120

Requirements:

1. Contribution Margin Analysis:
   • Calculate the contribution margin per unit and contribution margin ratio for Product A and Product B using marginal costing principles.

1. Break-Even Analysis:
   • Perform a break-even analysis to determine the number of units and sales revenue needed for Nu Electronics Ltd. to break even, considering marginal costing insights.

1. Profitability Comparison:
   • Determine which product (Product A or Product B) generates higher profitability based on the contribution margin ratio calculated using marginal costing.

1. Sales Mix Analysis:
   • Recommend a sales mix that maximizes Nu Electronics Ltd.'s overall contribution margin, incorporating marginal costing concepts.

1. Cost Management Strategies:
   • Propose two cost management strategies that Nu Electronics Ltd. could implement to enhance profitability, based on marginal costing insights.