Fast Track produces two types of exercise treadmills: regular and deluxe. The exercise craze is such that Fast Track 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? Fast Track's constraint is machine hours Requirement 2. Which model should Fast Track produce? (Hint: Use the allocation of fixed manufacturing overhead to determine the proportion of machine hours used by each product.) Fast Track should produce the product with the highest contribution margin per unit of the constraint Now prepare the product mix analysis by starting with the contribution margin per unit. Deluxe treadmill Regular treadmill Sale price per unit Variable costs per unit Contribution margin per unit Data table Per Unit Deluxe Regular 1,010 $ 560 GA 280 90 74 Sales Price Costs: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead* Variable operating expenses Total costs 192 80 240 114 38 71 111 819 471 $ 191 $ 89 Operating income *allocated on the basis of machine hours SERRES Requirements 1. What is the constraint? 2. Which model should Fast Track produce? (Hint: Use the allocation of fixed manufacturing overhead to determine the proportion of machine hours used by each product) 3. If Fast Track should produce both models, compute the mix that will maximize operating income