TreadFast produces two types of exercise treadmills: Regular and Deluxe. The exercise craze and related demand is such that TreadFast 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?

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Per Unit Deluxe 1,000 $ Regular 540 Sales price Less expenses: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable operating expenses Total expenses Operating income 340 80 82 152 194 76 40 59 449 80 125 779 $ 221 91 %24