ExerTread produces two types of exercise treadmills. Regular and Deluxe. The exercise craze and related demand is such that ExerTread could use all of its available machine hours producing either model. The two models are processed through the same 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 ExerTread Product Mix Analysis Deluxe Regular 1 2 3 Sale price A B C Per Unit Deluxe Regular $ 1,010 $ 550 4 Less expenses: 5 Direct materials 350 150 6 Direct labor 88 192 7 Variable manufacturing overhead 252 84 Fixed manufacturing overhead" 102 34 ExerTread should produce the product with the times as much overhead cost is allocated to each Deluxe model as to each Regular model. In other words, it takes For each unit of the Deluxe model produced (contributing produce units of the Regular model (contributing ExerTread should produce contribution margin per unit of the constraint. 9 Variable operating expenses 113 65 times as many machine hours to produce a Deluxe model. 10 Total expenses $ 905 $ 525 11 Operating income $ 105 $ 25 per machine hour to operating income), Exer Tread can per machine hour to operating income). Therefore, *Allocated on the basis of machine hours Print Done - X