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Exer Light produces two types of exercise treadmills: regular and deluxe. The exercise craze is such that Exer Light could use all its available
Exer Light produces two types of exercise treadmills: regular and deluxe. The exercise craze is such that Exer Light could use all its available machine hours to produce either model. The two models are processed through the same production departments. Data for both models are as follows: (Click the icon to view the data.) Read the requirements Requirement 1. What is the constraint? Exer Light's constraint is Requirement 2. Which model should Exer Light produce? (Hint: Use the allocation of fixed manufacturing overhead to determine the proportion of machine hours used by each product) Exer Light should produce the product with the Now prepare the product mix analysis by starting with the contribution margin per unit Sale price per unit Deluxe treadmill Regular treadmill Variable costs per unit Contribution margin per unit Next, calculate the proportion of machine hours used. Fixed overhead Total overhead Proportion of machine hours used Deluxe Treadmill Regular Treadmill dinn margin per machine hour.
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