Portsmouth Company makes upholstered furniture. 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: nts Selling price per unit Variable cost per unit Upholstery labor-hours per unit Recliner Sofa Love Seat $ 1,2625 1,7005 1,400 s 750 $ 1,300 $ 1.100 8 hours 10 hours 4 hours eBook Hint Print eferences 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 furniture for Portsmouth at a price of $35 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. Required 1 Required 2 Required 3 nt ances Required 1 Required 2 Required 3 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? Maximum overtime premium per hour Required 1 Required 2 Required 3 A small nearby upholstering company has offered to upholster furniture for Portsmouth at a price of $35 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? Show less Additional contribution margin per hour Dorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $375,000 per quarter. For financial reporting purposes, the company allocates these costs to the joint products on the basis of their relative sales value at the split-off point Unit selling prices and total output at the split-off point are as follows: Quarterly Product Selling Price Output $ 25.00 per pound 14,000 pounds B $ 19.00 per pound 21,800 pounds $31.00 per gallon 5,200 gallons A Each product can be processed further after the split-off point. Additional processing requires no special facilities. The additional processing costs (per quarter) and unit selling prices after further processing are given below: Product Additional Processing Costs $ 83,800 $121,080 $ 55,280 Selling Price $30.60 per pound $25.60 per pound $39.60 per gallon B Required: 1. What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point? 2. Based on your analysis in requirement 1, which product or products should be sold at the split-off point and which product or products should be processed further? Complete this question by entering your answers in the tabs below. Saved Help Save & Exit Check my 6 c $ 55,280 $39.60 per gallon 5 Required: 1. What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point? 2. Based on your analysis in requirement 1, which product or products should be sold at the split-off point and which productor products should be processed further? oints eBook Complete this question by entering your answers in the tabs below. Hint Print Required 1 Required 2 References What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point? (Enter "disadvantages" as a negative value.) Product A Product B Product C Financial advantage (disadvantage) of further processing Required Required 2 > Savuu $ 55,280 $39.60 per gallon Required: 1. What is the financial advantage (disadvantage) of further processing each of the three products beya 2. Based on your analysis in requirement 1, which product or products should be sold at the split-off po products should be processed further? Complete this question by entering your answers.in the tabs below. Required 1 Required 2 5 Based on your analysis in requirement 1, which product or products should be sold at the split-off point a products should be processed further? Product A Product B Product C Sell at split-off point? Process further?
