Tread Light produces two types of exercise treadmills: regular and deluxe. The exercise craze is such that Tread Light 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: Data table Per Unit Deluxe Regular 610 Sales Price $ 1,030 $ uuring overhead to determine the proportion of machine hours used by each product.) Costs: Direct materials 320 130 Direct labor 88 180 270 90 Variable manufacturing overhead Fixed manufacturing overhead* 102 34 121 63 Variable operating expenses 901 497 Total costs $ 129 $ 113 Operating income Requirement 1. What is the constraint? Tread Light's constraint is Requirement 2. Which model should Tread Light produce? (Hint: Use the allocation of fixed manufacturing overhead to determine the proportion of machine hours used by each product.) Tread Light should produce the product with the Now prepare the product mix analysis by starting with the contribution margin per unit. Deluxe Regular treadmill treadmill Sale price per unit Variable costs per unit Contribution margin per unit Now prepare the product mix analysis by starting with the contribution margin per unit. Deluxe Regular treadmill treadmill Sale price per unit Variable costs per unit Contribution margin per unit Next, calculate the proportion of machine hours used. Fixed overhead : Total overhead Proportion of machine hours used Deluxe Treadmill % Regular Treadmill . % Finally, calculate the contribution margin per machine hour. Deluxe Treadmill % Regular Treadmill % Finally, calculate the contribution margin per machine hour. Deluxe Regular treadmill treadmill Units that can be produced each machine hour Contribution margin per machine hour Requirement 3. If Tread Light should produce both models, compute the mix that will maximize operating income. Tread Light should produce because