Exercise 13-6 (Algo) Managing a Constrained Resource [LO13-6] Portsmouth Company makes upholstered fumiture, Its only variable cost is direct materiak. The demand for the company's products far exceeds its manufacturing copacity. The botveneck (or constraint) in the production process is uphoistery tabor-hours, information concerning three of Portsmouth's products appears below: Required: 1. Portsmouth is considering paying its upholstery laborers hourly compensation, in addition to their usuol 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 wiling 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 $45 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 uphoistering company? Complete this question by entering your answers in the tabs below. Portsmouth is considering paying its uphoistery laborers hourly compensation, in oddition 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 cornpany be willing to pay to keep the upholstery shop open after normal working hours? 3. Should Portsmouth hire the nearby upholstering company? Complete this question by entering your answers in the tabs below. A small nearby upholstering company has offered to upholster furniture for Portsmouth at a price of $45 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? Portsmouth's own craftsmen on the simpler upholstering jobs such as the Love Seat. How 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. Should Portsmouth hire the nearby upholstering company
