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Fit Tima produces two types of exercise treadmills. Regular and Deluxe. The exercise craze and related demand is such that Fittime could use all of
Fit Tima produces two types of exercise treadmills. Regular and Deluxe. The exercise craze and related demand is such that Fittime 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 wil 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 0 Data Table FitTime Product Mix Analysis Per Unit Dolore 960 Regular 560 sale price per unit Deluxe 960 $ Regular 560 $ Variable costs per unit Contribution margin per unit Sale price Lass expenses Direct materials 320 Units produced with equivalent number of more Souns 150 Contribution margin for equivalent number of machine hours 75 246 180 82 F Time should produce the product with the contribution margin per unit of the constraint 36 108 115 71 times as much overhead cost is allocated to each Deluxe model as to each Regular model in other words, it takes times as many machine hours to produce a Delme model Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable operating expenses Total expenses Operating income "Allocated on the basis of machine Hours $ 865 5 519 5 95 5 41 For each unit of the Deluxe model produced contributing 5 produce 101 units of the Regular model contributing $ Fit Time should produce per machine hour to operating Income). Ft Time can per machine hour to operating income). Therefore, Print Done only the Deloce model only the Regular model three times as many Deluxe models as Regular models three times as many Regular models as Deluxe models
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