Phi Automotive Parts

Scenario: Cost Control and Profitability Analysis

Product	Selling Price per Unit ($)	Variable Cost per Unit ($)	Fixed Costs ($)
Product X	150	100	200,000
Product Y	200	120	250,000

Requirements:

1. Contribution Margin Calculation:
   • Calculate the contribution margin per unit and contribution margin ratio for Product X and Product Y at Phi Automotive Parts using marginal costing principles.

1. Break-Even Analysis:
   • Perform a break-even analysis to determine the number of units and sales revenue needed for Phi Automotive Parts to break even, incorporating 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 Phi Automotive Parts' overall contribution margin, applying marginal costing concepts.

1. Cost Control Measures:
   • Recommend two cost control measures that Phi Automotive Parts could implement to reduce costs and increase profitability, based on marginal costing analysis.