X 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 X products appears below: Recliner Sofa Love Seat Selling price per unit $ 1,200 $ 1,790 $ 1,525 Variable cost per unit $ 800 $ 1,250 $ 1,100 Upholstery labor-hours per unit 8 hours 12 hours 5 hours Required: 1. X 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 rate 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 $42 per hour. The management of x is confident that this upholstering companys work is high quality and their craftsmen can work as quickly as xs own craftsmen on the simpler upholstering jobs such as the Love Seat. How much additional contribution margin per hour can x earn if it hires the nearby upholstering company to make Love Seats? 3. Should x hire the nearby upholstering company?