Pedal Harder produces two types of stationary bikes: regular and deluxe. Currently, the number of people exercising is such that Pedal Harder could use all available machine hours to produce either model. The two models are processed through the same production departments. Pedal Harder has a total of 640 machine hours available per month. Monthly fixed costs per month total $134,000. Data for both models is as follows: Per Unit Regular Deluxe Sales $620 $1,060 Costs: Direct Materials $80 $270 Direct Labor $170 $78 Variable Manufacturing Overhead $91 $269 Fixed Manufacturing Overhead $39 $156 Variable Operating Expenses $65 $114 Total Costs $445 $887 Operating Income $175 $173 1. Calculate the Contribution Margin per machine hour. Regular Deluxe Sales price per unit Variable cost per unit Contribution Margin per unit 2. Calculate the proportion of machine hours used. Type of Bike Fixed OH / Total OH = Proportion Used as a % Regular Bike Deluxe Bike / Regular Deluxe Proportion of units produced per equivalent hour Contribution margin per type Contribution margin per equivalent machine hour 3. Which bike type should be emphasized? Select an answer 4. What will the company's operating income be? Pedal Harder Contribution margin per equivalent hour Number of machine hours available Total Contribution Margin Fixed Costs Operating Income