TreadMile produces two types of exercise treadmills: Regular and Deluxe. The exercise craze and related demand...

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TreadMile produces two types of exercise treadmills: Regular and Deluxe. The exercise craze and related demand is such that TreadMile 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 will 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. TreadMile Product Mix Analysis Deluxe Regular TreadMile should produce the product with the contribution margin per unit of the constraint. 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 Deluxe model. produce For each unit of the Deluxe model produced (contributing TreadMile should produce units of the Regular model (contributing per machine hour to operating income), TreadMile can per machine hour to operating income). Therefore, Data table 1 2 3 Sale price A Per Unit Deluxe Regular $ 1,030 $ 600 4 Less expenses: 5 Direct materials 270 150 6 Direct labor 86 192 7 Variable manufacturing overhead 252 84 8 Fixed manufacturing overhead* 102 34 9 Variable operating expenses 109 59 10 Total expenses $ 819 $ 519 11 Operating income $ 211 $ 81 *Allocated on the basis of machine hours - X TreadMile produces two types of exercise treadmills: Regular and Deluxe. The exercise craze and related demand is such that TreadMile 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 will 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. TreadMile Product Mix Analysis Deluxe Regular TreadMile should produce the product with the contribution margin per unit of the constraint. 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 Deluxe model. produce For each unit of the Deluxe model produced (contributing TreadMile should produce units of the Regular model (contributing per machine hour to operating income), TreadMile can per machine hour to operating income). Therefore, Data table 1 2 3 Sale price A Per Unit Deluxe Regular $ 1,030 $ 600 4 Less expenses: 5 Direct materials 270 150 6 Direct labor 86 192 7 Variable manufacturing overhead 252 84 8 Fixed manufacturing overhead* 102 34 9 Variable operating expenses 109 59 10 Total expenses $ 819 $ 519 11 Operating income $ 211 $ 81 *Allocated on the basis of machine hours - X