Exercise 13-6 (Algo) Managing a Constrained Resource [LO13-6] Hortsmoutr Company makes uphoistered fumiture. As only variable cost is direct matenials. The demand for the companys protucts far esceeds is manufacturing capacity. The bottleneck (or constraint) in the producton process is upholstery labocthours, Information concernirig three of Portsfrotatis products appears below: Reequitedt 1. Portsmoulf is considering paying its uphoistery laborers hourly compensation, in addition to their usual salaries to work overtime. Assuming that this entra time would be used to produce sofas, up to how much of an overtime rate per hour should the company be whing to pay to keep the upholstery 1 pop open affer normal working hovis? 2 A simaif nearby upholsteing compsty has offored to uphoister furaiture for Portsmoiah at a price of 541 per hour. The management of Portsmouth is confident that this uphoistering company's work is high quality and their crafsmen can wook as quiclily as Portsmouth's own craftemen on the simpler uphoistering jobs such as the Love Seat How much additional cantributir "Targin. per. houf car Portsmouth oarn if it hires the nearby uphoistering company to make Love Seats? 3 5hould Portsmouth hire the nearby uphoistering company? Complete this question by entering your answers in the tabs below, Portamouth is considering paying its uphotstery laborers hourfy compensation, in addition to their ustal salaries, to wark. Whining to pay to hoep the upitosstery shop open-aiter fiomot working houss? 3. Shouid Portanouth hine the hearby upholitering comparyy? Complete this question by entering your answers in the tabs below. Oredirne. Agsurning that this extra time would be used to produce sofas, up to how much of an overtinte rate per houd ahould the cemparly be wiving to pary to iaed the upheistery thop open afier aornhal working hours? of Poitsmourh in coridident that campany has offered normal working hours? Fovtsmouth own crafemen on this upholstering compuny's work furnhure for Partsmouth at a price or $41 per hour. Fhe management How can Portimouth earn if it hires the neweby uphoring jobs such as the towe seat. Hoir craftsmen can work as quickly as 3. Should Portwmouth hire the nearby uphoistering compang company to mako Loyo. How mug? Complete this question by entering your answers in the tabs below, A sman noarty upholetering company has offered to upholster furniture for Portsmouth at a price of s41 per hour. The guicky as Aortumouth ow own craftamen on the simpler uphoistering jobs such as the Love Seat how their craftsmen can wark as contribution margin per, hour can Portsmouth earn if it hires the nearby upholstering company to make tove Seats? Show less a 4
