Answered step by step
Verified Expert Solution
Question
1 Approved Answer
ExerLight produces two types of exercise treadmills: Rogular and Deluxe The exercise craze and related demand is such that ExerLight could use all of its
ExerLight produces two types of exercise treadmills: Rogular and Deluxe The exercise craze and related demand is such that ExerLight could use all of its available machine hours producing either model. The two models are processed through the sarne production department (Click the icon to view the data) .) What product mix will maximize operating income? (Hint. Use the allocation of fixed manufacturing overhead to determine the proportion of machine hours used by each product.) Prepare the product mix analysis. Data table ExerLight Product Mix Analysis A B Deluxe 1,050 Regular 600 1 Per Unit Sale price per unit 2 111 57 Variable costs per unit Contribution margin per unit Deluxe Regular S 1,050 $ 600 3 Sale price 4 Less expenses: Units produced with equivalent number of machine hours 5 Direct materials 150 Contribution margin for equivalent number of machine hours 260 80 178 6 6 7 7 8 8 282 941 Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable operating expenses 144 48 g 111 57 10 Total expenses S 527 877 $ 173 $ $ S S 73 11 Operating income *Allocated on the basis of machine hours Print Done
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started