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Point 1: Mansfield Manufacturing makes two products, Keatchie and Converse. Each goes through its own production process, until the final step-painting. Each must go through the same painting process. The painting department uses specialized equipment and has a capacity of 2,460 hours per year. Product Keatchie has a unit selling price of $600, and unit variable costs of $480, while product Converse sells for $450 and has unit variable costs of $375. Keatchie requires 5 hours of painting time, whereas Converse requires 3 hours of painting time.
Question 1: Calculate the contribution margin for each product.
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