${?}^1($Click the icon to view the data.$)$

Read the requirements ${?}^2.$

Requirement $1.$ What is the constraint?

Exer Tread's constraint is machine hours.

Requirement $2.$ Which model should Exer Tread produce? $($Hint: Use the allocation of fixed manufacturing overhead to determine the proportion of machine hours used by each product.$)$

Exer Tread should produce the product with the highest contribution margin per unit of the constraint

Now prepare the product mix analysis by starting with the contribution margin per unit.

Next, calculate the proportion of machine hours used.

Finally, calculate the contribution margin per machine hour.

Requirement $3.$ If Exer Tread should produce both models, compute the mix that will maximize operating income. $1$: Data Table

$*$allocated on the basis of machine hours

$2$: Requirements

What is the constraint?

Which model should Exer Tread produce? $($Hint: Use the allocation of fixed manufacturing overhead to determine the proportion of machine hours used by each product.$)$

If Exer Tread should produce both models, compute the mix that will maximize operating income.

$(1)$ half standard models and half deluxe models

each model contributes an equal amount to operating income for the period

only the deluxe model

this model produces the highest contribution margin per unit

only the regular model

this model produces the most contribution margin per machine hour