Portsmouth Company makes upholstered furniture. Its only variable cost is direct materials. The demand for the...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Portsmouth Company makes upholstered furniture. Its only variable cost is direct materials. The demand for the company's products far exceeds its manufacturing capacity. The bottleneck (or constraint) in the production process is upholstery labor-hours. Information concerning three of Portsmouth's products appears below: Selling price per unit Variable cost per unit Upholstery labor-hours per unit Required: Recliner $ 1,298 $ 850 Sofa $ 1,900 $ 1,350 Love Seat $ 1,270 $ 950 8 hours 11 hours 4 hours 1. Portsmouth is considering paying its upholstery laborers hourly compensation, in addition to their usual salaries, to work overtime. Assuming this extra time would be used to produce sofas, up to how much of an overtime rate per hour should the company be willing to pay to keep the upholstery shop open after normal working hours? 2. A small nearby upholstering company has offered to upholster furniture for Portsmouth at a price of $47 per hour. The management of Portsmouth is confident this upholstering company's work is high quality, and its craftsmen can work as quickly as Portsmouth's own craftsmen on the simpler upholstering jobs such as the Love Seat. How much additional contribution margin per hour can Portsmouth earn if it hires the nearby upholstering company to make Love Seats? 3. Should Portsmouth hire the nearby upholstering company? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Portsmouth is considering paying its upholstery laborers hourly compensation, in addition to their usual salaries, to work overtime. Assuming this extra time would be used to produce sofas, up to how much of an overtime rate per hour should the company be willing to pay to keep the upholstery shop open after normal working hours? Maximum overtime rate per hour < Required 1 Required 2 > Portsmouth Company makes upholstered furniture. Its only variable cost is direct materials. The demand for the company's products far exceeds its manufacturing capacity. The bottleneck (or constraint) in the production process is upholstery labor-hours. Information concerning three of Portsmouth's products appears below: Selling price per unit Variable cost per unit Upholstery labor-hours per unit Required: Recliner $ 1,298 $ 850 Sofa $ 1,900 $ 1,350 Love Seat $ 1,270 $ 950 8 hours 11 hours 4 hours 1. Portsmouth is considering paying its upholstery laborers hourly compensation, in addition to their usual salaries, to work overtime. Assuming this extra time would be used to produce sofas, up to how much of an overtime rate per hour should the company be willing to pay to keep the upholstery shop open after normal working hours? 2. A small nearby upholstering company has offered to upholster furniture for Portsmouth at a price of $47 per hour. The management of Portsmouth is confident this upholstering company's work is high quality, and its craftsmen can work as quickly as Portsmouth's own craftsmen on the simpler upholstering jobs such as the Love Seat. How much additional contribution margin per hour can Portsmouth earn if it hires the nearby upholstering company to make Love Seats? 3. Should Portsmouth hire the nearby upholstering company? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Portsmouth is considering paying its upholstery laborers hourly compensation, in addition to their usual salaries, to work overtime. Assuming this extra time would be used to produce sofas, up to how much of an overtime rate per hour should the company be willing to pay to keep the upholstery shop open after normal working hours? Maximum overtime rate per hour < Required 1 Required 2 >
Expert Answer:
Posted Date:
Students also viewed these accounting questions
-
Seeking for information of a specific organization then answer following questions: (1) Give a brief introduction of the chosen organization. (2) Explain the type of the chosen organization. What are...
-
The Hanks Company has prepared the following changes in account balances for the worksheet to support its 2007 statement of cash flows: Additional information: The net income was $1,300. Depreciation...
-
Frank was terminated for cause from Pineland Industries in Georgia. As of the date of his termination, he had accrued 24 hours of vacation and 15 hours of sick time. When must his final pay be...
-
In complexity science, the movement of an organization as it changes from one attractor or mission statement to another is known as: A. Leverage. B. Bifurcation. C. Chaos. D. Order.
-
Schaefer Organic Farms purchased a new tractor at a cost of $80,000. Annual operating cash inflows are expected to be $30,000 each year for four years. At the end of the tractors useful life, the...
-
Heidi Jackson, the chief financial officer, is responsible for The Steel Center's cash budget for 20X6. The budget will help Jackson determine the amount of long-term borrowing needed to end the year...
-
critical thinking exercise 2-2 FINDING THE EQUILIBRIUM POINT In 2018, Epic Electronics sold 350,000 digital video recorders (DVRs). Based on the company's analysis of the DVR market, the company...
-
The project criteria outlined in Table 9.5 was provided for a sample problem. What other criteria might be a useful part of the more general case of project portfolio management? Project criteria...
-
What are the stages in the classic consumer decision-making model?
-
Over the range of cylindrical parts manufactured on a computer-controlled lathe, the standard deviation of the diameters is 0.002 millimeter. (a) What does Chebyshev's theorem tell us about the...
-
Find the phase voltages \(V_{a n}, V_{b n}\), and \(V_{c n}\) whose sequence components are: \(V_{0}=50 / 80^{\circ}, V_{1}=100 / 0^{\circ}, V_{2}=50 / 90^{\circ} \mathrm{V}\).
-
Can you name five types of channels of communication?
-
For the equation, dG = V dP -S dT, determine the Maxwell relation for the variables in this problem. Select one: a. (SG/&V)p = -(SG/SS)T b. -(ST/SP)v = (8S/&V)T %3D c. (SP/ST)v = -(5T/SP)S d....
-
If a force of F = 50 Ib is applied to the pads at A and C, determine the smallest dimension d required for equilibrium if the spring has an unstretched length of 1 ft. B 1 ft 1 ft F k = 15016/fr 1ft...
-
American Airlines has outstanding lines of credit and various loan agreements with a number of financial institutions. Under the terms of these debt contracts, American is required to (a) maintain a...
-
Describe a conflict that may arise between the shareholders of a company and the debtholders of the company. Discuss what the debtholders might do to resolve that conflict and explain why you feel...
-
Describe a conflict that may arise between the shareholders of a company and the managers of the company. Discuss what the shareholders might do to overcome that conflict and explain why you feel...
Study smarter with the SolutionInn App