Lifemaster produces two types of exercise treadmills: Regular and Deluxe. The exercise craze is such that Lifemaster could use all of its available machine hours producing either model. The two models are processed through the same Production Department.

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.)

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Per Unit Deluxe Regular Sales price Costs: 1,000 S 550 Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Variable operating expenses Total cost. 290 S 100 180 80 40 65 465 155 85 80 240 120 115 845 Operating inco