Excer Treads produces two types of exercise treadmills: Regular and Deluxe. The exercise craze and related demand is such that Excer Treads 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 Regular Sales price Less expenses: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead* Variable operating expenses Total expenses Operating income 1,020 $ 580 320 110 88 168 186 84 80 113 769 40 69 489 251 91