Answer 1.
Particulars | Sofa ($) |
Selling price per unit | 2,000 |
Variable cost per unit | 1,300 |
Contribution margin per unit (a) | 700 |
Upholstery shop time required to produce one unit (b) | 14 hours |
Maximum overtime premium per hour (a) / (b) [700/12] | 50 |
Answer 2.
Particulars | Love Seat ($) |
Selling price per unit | 1,650 |
Variable cost per unit | 1,200 |
Contribution margin per unit (a) | 450 |
Upholstery shop time required to produce one unit (b) | 5 hours |
Contribution margin per unit of the constrained resource (a) / (b) [ 450/5] | 90 |
price charged to upholster by another firm | 47 |
Additional contribution margin [90-47 ] | 43 |
Answer 3.
Yes it should be hired as there is additional margin
Exercise 11-6 Managing a Constrained Resource (LO11-6] Portsmouth Company makes upholstered furniture. Its only variable cost...
Exercise 12-6 Managing a Constrained Resource (L012-6] 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: Selling price per unit Variable cost per unit Upholstery labor-hours per unit $ $ Recliner 1,284 $ 900 $ 6 hours Sofa Love Seat 1,700 $ 1,520 1,200 $ 1,100...
Exercise 11-6 Managing a Constrained Resource (LO11-6] 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: Selling price per unit Variable cost per unit Upholstery labor-hours per unit Recliner Sofa Love Seat $ 1,190 $ 1,880 $ 1,550 $ 700 $ 1,250 $ 1,100 7 hours...
Exercise 11-6 Managing a Constrained Resource (LO11-6) 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: Selling price per unit Variable cost per unit Upholstery labor-hours per unit Recliner Sofa Love Seat $ 1,298 $ 1,855 $ 1,280 850 $ 1,250 $ 1.000 7 hours 11...
Exercise 12-6 Managing a Constrained Resource (LO12-6] 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: Selling price per unit Variable cost per unit Upholstery labor-hours per unit $ $ Recliner 1,330 700 9 hours $ $ Sofa Love Seat 2,819 $ 1.558 1,350 $ 1,158...
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 Selling price per unit Variable cost per unit Upholstery labor hours per unit $ $ Recliner 1,480 $ 800 $ 8 hours Sofa Love Seat 1,800 $ 1,500 1,200 $ 1,000 10 hours 5 hours Required: 1....
Portsmouth Company... 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: points Selling price per unit Variable cost per unit Upholstery labor-hours per unit Recliner Sofa Love Seat $ 1,156 $ 1,850 $ 1,300 $ 750 $ 1,250 $ 1,000 7 hours 12 hours 4 hours...
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: Selling price per unit Variable cost per unit Upholstery labor-hours per unit Recliner Sofa $ 1,000 $ 1,900 $ 700 $ 1,250 6 hours 13 hours Love Seat $ 1,500 $ 1,200 4 hours Required: 1. Portsmouth...
Should Portsmouth hire the nearby upholstering company? 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: Selling price per unit Variable cost per unit Upholstery labor-hours per unit Recliner Sofa Love Seat $ 1,214 $ 2,065 $ 1,440 $ 750 $ 1,350 $ 1,100 8 hours...
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: Recliner $ 1,228 Sofa 1,800 Love Seat $ 1,370 $ Selling price per unit Variable cost per unit 8 hours 10 hours 4 hours 1. Portsmouth is considering paying its upholstery laborers hourly compensation, in addition to...
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: Selling price per unit Variable cost per unit Upholstery labor-hours per unit Love Recliner Sofa Seat $ 1,276 $ 1,700 $ 1,275 $ 800 $ 1,250 $ 850 10 7 hours 5 hours hours on Required: 1....