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Iota Manufacturing Inc. Scenario: Production Cost Analysis Product Selling Price per Unit ($) Variable Cost per Unit ($) Fixed Costs ($) Product X 100 60

Iota Manufacturing Inc.

Scenario: Production Cost Analysis

Product

Selling Price per Unit ($)

Variable Cost per Unit ($)

Fixed Costs ($)

Product X

100

60

200,000

Product Y

150

80

250,000

Requirements:

  1. Contribution Margin Calculation:
    • Calculate the contribution margin per unit and contribution margin ratio for Product X and Product Y using marginal costing principles.
  1. Break-Even Analysis:
    • Perform a break-even analysis to determine the number of units and sales revenue needed for Iota Manufacturing Inc. to break even, considering marginal costing insights.
  1. Profitability Analysis:
    • Determine which product (Product X or Product Y) generates higher profitability based on the contribution margin ratio calculated using marginal costing.
  1. Sales Mix Analysis:
    • Conduct a sales mix analysis to identify the optimal sales mix that maximizes Iota Manufacturing Inc.'s overall contribution margin, considering marginal costing concepts.
  1. Strategic Pricing Decision:
    • Recommend a pricing strategy for Iota Manufacturing Inc. to achieve its profit target, considering the contribution margin analysis using marginal costing.

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