Lifemaster produces two types of exercise treadmills: regular and deluxe. The exercise craze is such that Lifemaster could use all its available machine hours to produce either model. The two models are processed through the same production departments. Data for both models is as follows:

Requirements
1. What is the constraint?
2. Which model should Lifemaster produce?
3. If Lifemaster should produce both models, compute the mix that will maximize operatingincome.

Transcribed Image Text:

Per Unit Deluxe Regular Sale price 1,020 S %24 560 Costs: Direct materials 300 90 Direct labor 88 188 Variable manufacturing overhead Fixed manufacturing overhead Variable operating expenses 264 88 138 46 111 65 Total cost 901 119 S 477 83 Operating income * Allocated on the basis of machine hours