Chapter 11 Graded Homework 5 Exercise 11-6 (Algo) Managing a Constrained Resource [LO11-6] 208 points 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 $ 1,302 $ 750 9 hours Selling price per unit Variable cost per unit Upholstery labor-hours per un Sofa $ 2,055 $ 1,350 13 hours Love Seat $1,500 5 1.050 5 hours Book fone to Required: 1. Portsmouth is considering paying its upholstery taborers 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 $52 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 Sent. How much additional contribution margin per hour con Portsmouth eam fit hires the nearby upholstering company to make Love Seats? 3. Should Portsmouth hire the nearby upholstering company? Refraces Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required) Portsmouth is covering 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 sola, 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? Chapter 11 Graded Homework 5 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 for exceeds its manufacturing capacity. The bottleneck (or constraints in the production process is upholstery tabor-hours. Information concerning three of Portsmouth's products appears below 208 port 2 Selling price per unit Variable cost per unit Upholstery Labor-hours per unit Recliner $ 1,362 $ 750 5 hours sota $ 2,065 $ 1,350 13 hours Love Seat $1,500 $ 1,50 5 hours ook 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 552 per hout 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 upholsterino jobs such as the Love Seat How much additional contribution margin per hour can Portsmouth an iritires the nearby upholstering company to make love Seats? 3. Should Portsmouth nie the nearby upholstering company? ei o Complete this question by entering your answers in the tabs below. Ben Required 1 Required 2 Required Asmall nearby upholstering company has offered to upholster Furniture for Portsmouth at a price of $52 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? Show less Antworth Save Chapter 11 Graded Homework 6 Exercise 11-13 (Algo) Sell or Process Further Decision [LO11-7] 23 points Wexpro, Incorporated, produces several products from processing 1 ton of clypton, a rare mineral. Material and processing costs total $53,000 per ton, one fourth of which is allocated to product X15. Eight thousand one hundred units of product X15 are produced from each ton of clypton. The units can either be sold at the split-off point for $17 each, or processed further at a total cost of $7100 and then sold for $23 each Required: 1. What is the financial advantage disadvantage of further processing product X157 2. Should product X15 be processed further or sold at the split off point? ok Pus 2. Product X15 should be o rences
