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E8-25A (book/static) Question Help TreadFast produces two types of exercise treadmills: Regular and Deluxe. The exercise crazPer Unit Deluxe 1,000 $ Regular 540 Sale price 6 Less expenses: Direct materials Direct labor Variable manufacturing overhead

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Answer #1
Product Mix Analysis
Deluxe Regular
Selling Price $1,000.00 $540.00
Less: Variable Cost
Direct Material $340.00 $80.00
Direct Labour $82.00 $194.00
Variable manufacturing overhead $152.00 $76.00
Contribution margin per unit (a) $508.00 $384.00
Machine Hour Required per Unit
(80/40=2):1
2 1
Contribution margin per machine Hour (a/b) $254.00 $384.00
Ranking(in order of highest contribution per pound) II I

Regular Product will maximize the net operating Income

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