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1. The Domestic Engines Co. produces the same power generators in two plants, a new plant in Peoria and an older plant in Moline. The

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1. The Domestic Engines Co. produces the same power generators in two plants, a new plant in Peoria and an older plant in Moline. The following data are available for the two parts: New plant in Peoria Older plant in Moline Selling price Variable manufacturing cost per unit Fixed manufacturing cost per unit Variable marketing and distribution cost per unit Fixed marketing and distribution cost per unit Total cost per unit Operating income per unit Production rate per day Normal annual capacity usage Maximum annual capacity $150 $72 30 14 19 135 $150 15 14 14.5 131.5 $15 $18.5 400 units,000 240 days 300 days 320 units 240 days 300 days All fixed costs per unit are calculated based on a norma) capacity usage consisting of 240 working days. When the number of working days exceeds 240, overtime raise the variable manufacturing costs of additional units by $3.00 per unit in Peoria and $8.00 per unit in Moline. Domestic Engines Co. is expected to produce and sell 192,000 power generators during the coming year. Required: A. Determine how the production of 192,000 units should be allocated between Peoria and Moline plants to maximize operating income for Domestic Engines. B. Calculate the maximize operating income for Domestic Engines

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