Portsmauth Company makes upholstered furniture, Its only variable cost is direct materials. The demand for the company's products far exceeds its manufacturing capocity. The bottleneck (or constraint) in the production process is upholstery labor-thours. Information concerning three of Portsmouths products oppears below. Required: 1. Portsmouh is considering paying its upholstery laborers hourly compensation, in addition to their usual salaries, to work overtime. Assuming that this extra time would be issed to produce solas, up to how much of an overtime tate per hour should the compary be Willing to jlay to keep the upholstery shop open after normal working hours? 2. A small nearby upholstering company has offered to upholster forniture for Portimouth at a price of 94t por hour. The management of Portsmouth is confldent that this upholstering company's work is high quality and their craftsmen can work as quickly as Portsmouth's own crafismen on the simpler upholsering jobs such as the Love Seat. Hiow much addibonal contribution margin per hour can Portsmouth earn if it hires the nearby upholstering company to mave Love Seats? 3. Shoudd Portsmouth hire the nearby upholstering company? Complete this question by entering your answers in the tabs below. Portamooth is considering paying its upholstery laborers hourly compensation, in additson to their usual sataries, to work overtime. Assuming that this watra time would be used to prodace sofas, up to how much of an overtime rate per heur should the company be willing to pay to keep the upholstery shop open after narmal working hours? Portsmouti Company makes uphelstered fumture. its ony variable cost is orect matepials. The demand for the company's pruducts for exceecs its martufacturing capacify. The bottleneck for constraint hi the productian process is upholitery labar-heurs. Infermatian concerting three of Portmouth's arodacts appeacs below; Required: 1. Portambueh is conskering paying its upholstery laborers hourly compensation, in addition to their usual salaries, to work overtime. Assuming that this eatra time would be used to produce solas. up to how fuch of an overtime rate pec hour should the compary tee wiling to pay to keep the uphatstery shop open afler normal working hours? 2. A smak nearby uaholstefing company has offered to ugholser furniture for Ponsenouth at a price of 941 per hour. The management of Portsmouth is confiders that tivs uphoistering compary's woik is high quality and their craftsmen con woik as quichly as Partsmouth's own crafismen cn the simpler uphobteing pobs such as the Love Seat. How much additional comti butico margin per hour can Portsmooth earn if it hires the nearby upheistensig compony to mube Lowe Sests? 3. Should Portamouth hire the neaby upholstering comparv? Complete this auestion by entering your anwwers in the tabs below. A smal nearby uphoistering company has offered to upholster furnture for Portamouth at a price of 441 per hout, The maxperment of Pertsmouth is confident that this spholstering comeany's work is high qualify and ther craftamen can work as euickly as Portsmouth's oan craftimen on the simpler upholstericy Jobs woh as the Love Seat, How much addrional coctroution margin per hour can Portmouth ears it is hires the nearby uphwistening company to make Leve Seats? far exteeds its marwactuing capschy. The botteneck (or constraintp in the productien process is upheistery labor hours. informatios concening three of Pertsmoutris products appears below. Required: wiling to pay to keep the upholatery shop ootn after norral worwing hours? 2. A smal nearby uphotstering company has offered to uphotstet frriture for Potamouth at a price of 441 per hour The managemert hour can Rorimmoves earn if it hires the neaiby yohisterne cempary to make tove Seats? 3. Shecld portamouth hire the fwartry upholstering colpany? Complete this auestien Dy antering vour anwwers in the tabe belew. Shauid Certamouth hire the nearby uphoducering company
