TreadLight produces two types of exercise treadmills: Regular and Deluxe. The exercise craze and related demand is such that TreadLight 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.
TreadLight
Product Mix Analysis
Data table
tableABCPer UnitDeluxe,RegularSale price,$$Less expenses:,,,,Direct materials,,Direct labor,,Variable manufacturing overhead,,Fixed manufacturing overheadVariable operating expenses,,Total expenses,$$Operating income,$$
Allocated on the basis of machine hours
