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Jansen Larken makes fine colonial reproduction furniture. Upholstered furniture is one of its major product lines and the bottleneck on this production line is time
Jansen Larken makes fine colonial reproduction furniture. Upholstered furniture is one of its major product lines and the bottleneck on this production line is time in the upholstery shop. Upholstering is a craft that takes years of experience to master and the demand for upholstered furniture far exceeds the companys capacity in the upholstering shop. Information concerning three of the companys upholstered chairs appears below: Jansen Larken Leather Library Chair Chippendale Fabric Armchair Selling price per unit $ 1,300 $ 1,800 $ 1,400 Variable cost per unit $ 800 $ 1,200 $ 1,000 Upholstery shop time required to produce one unit 8 hours 12 hours 5 hours More time could be made available in the upholstery shop by asking the employees who work in this shop to work overtime. Assuming that this extra time would be used to produce Leather Library Chairs, up to how much should the company be willing to pay per hour to keep the upholstery shop open after normal working hours? Maximum amount payable per hour $
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