4 Exercise 11-6 (Algo) Managing a Constrained Resource (L011-6) Book $950 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. Recliner Sofa Love Seat Selling price per unit $ 1,360 $ 1,670 $ 1.290 Variable cost per unit $ 800 $ 1,150 Upholstery laber-hours per unit 10 hours 13 hours 4 hours Required: 1 Portsmouth is considering paying its upholstery laborers hourly compensation, in addition to their usual salaries, to work overtime. Assuming that this extra time would be used to produce sofos, 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 $35 per hour. The management of Portsmouth is confident that this upholstering company's work is high quality and their 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? Hint Print rences Complete this question by entering your answers in the tabs below. Required Required 2 Required 3 Portsmouth is considering paying its upholstery laborers hourly compensation, in addition to their usual salaries, to work overtime. Assuming that 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 Asquired 2 > 4 Exercise 11-6 (Algo) Managing a Constrained Resource (LO11-6) 2 points BOOK 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: Recliner sota Love Seat Selling price per unit $1,360 51,670 $1.290 Variable cost per unit $300 5 1.150 $950 Upholstery Taber-hours per unit 10 hours 13 hours 4 hours Required: 1. Portsmouth is considering paying its upholstery laborers hourly compensation, in addition to their usual salaries, to work overtime. Assuming that 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 $35 per hour. The management of Portsmouth is confident that this upholstering company's work is high quality and their 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? Hint Print Reference Complete this question by entering your answers in the tabs below. Required Required Required A small nearby upholstering company has offered to upholster furniture for Portsmouth at a price of $35 per hour. The management of Portsmouth is condent that this upholstering company's work is high quality and their 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 cam if it hires the nearby upholstering company to make love Seats Show less Additional contribution margin per nou 4 2 DS 00 Exercise 11-6 (Algo) Managing a Constrained Resource (LO11-6) 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 for constraint in the production process is upholstery labor hours. Information concerning three of Portsmouth's products appears below: Recliner Sofa Love Seat Selling price per unit $ 1,36 $ 1,670 $1.290 Variable cost per unit $ 600 $ 1.150 1950 Upholstery tabor hours per unit 10 hours 13 hours 4 hours Required: 1. Portsmouth is considering paying its upholstery laborers hourly compensation, in addition to their usual salaries, to work overtime, Assuming that 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 $35 per hour. The management of Portsmouth is confident that this upholstering company's work is high quality and their craftsmen can work as quickly as Portsmouth's own craftsmen on the simpler upholstering jobs such as the Love Spot How much additional contribution margin per hour con Portsmouth earn it hires the nearby upholstering company to make love Seats? a Should Portsmouth hire the nearby upholstering company? Reference Complete this question by entering your answers in the tabs below. Required Required 2 Required Should Portomouth hire the nearby upholstering company? No (