See below

Hernon Precision Tools makes cutting tools for metalworking operations. It makes two types of tools: A6, a regular cutting tool, and EX4, a highprecision cutting tool. A6 is manufactured on a regular machine, but EX4 must be manufactured on both the regular machine and a high-precision machine. The following information is available: 'Click to view the information.) Read the muirements. Requirement 1. What product mix - that is, how many units of A6 and EX4 - will maximize Hernon's operating income? Show your calculations. (Enter an amount in each input cell including zero balances.) Begin by calculating the benet from only selling A6 or EX4. A6 EX4 Contribution margin per hour of the constrained resource x Hours of constrained resource Total contribution margin Less: Lease costs of the highprecision machine Net relevant benet Selling price 110 $ Variable manufacturing cost per unit 30 $ Variable marketing cost per unit 5 $ 15 Budgeted total xed overhead costs 300,000 $ 575,000 Hours required to produce one unit on the regular machine 1.0 0.5 Additional information includes the following: a. Hernon faces a capacity constraint on the regular machine of 50,000 hours per year. b. The capacity of the high-precision machine is not a constraint. 6. 0f the $575,000 budgeted xed overhead costs of EX4, $350,000 are lease payments for the high-precision machine. This cost is charged entirely to EX4 because Hernon uses the machine exclusively to produce EX4. The company can cancel the lease agreement for the high-precision machine at any time without penalties. d. All other overhead costs are xed and cannot be changed