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Portsmouth Company makes upholstered fumiture. Its only variable cost is direct materials. The demand for the company's products far exceeds its manufacturing capacity. The bottleneck

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Portsmouth Company makes upholstered fumiture. Its only variable cost is direct materials. The demand for the company's products far exceeds its manufacturing capacity. The bottleneck (or constraint) in the production process is upholstery labor hours. Information concerning three of Portsmouth's upholstered chairs appears below: 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 premium 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 fumiture for Portsmouth at a price of $40 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 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. Portsmouth is considering paying its upholstery laborers hourly compensation, in addition to their tseal salaries, to work overtime. Assuming that this extra time would be used to produce sofas, up to how much of an overtime premlum per hour should the company be willing to pay to keep the upholstery shep open after normal working hours? 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 premium per hour should the compan 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 $40 per hour. The manageme 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 eam if 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

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