(L.OBJ. 3) Product mix under production constraints [15 min] ExerLight produces two typ...

(L.OBJ. 3) Product mix under production constraints [15 min]

ExerLight produces two types of exercise treadmills: regular and deluxe. The exercise craze is such that ExerLight 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 ExerLight produce? (Hint: Use the allocation of fixed manufacturing overhead to determine the proportion of machine hours used by each product.)

3. If ExerLight should produce both models, compute the mix that will maximize operating income.