1 | Maximum overtime premium per hour | = | $ 45 | |
Workings: | ||||
Sofa: | ||||
Selling price per unit | = | $ 1,695 | ||
Less: | Variable cost per unit | = | $ 1,200 | |
(a) | Contribution per unit | = | $ 495 | |
(b) | Time required per sofa | = | 11 | hours |
(a) / (b) | Maximum overtime premium per hour | = | $ 45 | per hour |
2 | Additional contribution margin per hour | = | $ 30 | |
Workings: | ||||
Love seat: | ||||
Selling price per unit | = | $ 1,200 | ||
Less: | Variable cost per unit | = | $ 850 | |
(a) | Contribution per unit | = | $ 350 | |
(b) | Time required per Love seat | = | 5 | hours |
(a) / (b) | Contribution margin per hour | = | $ 70 | per hour |
Less: | Fixed charge | = | $ 40 | |
Additional Contribution margin per hour | = | $ 30 | ||
3 | Yes | |||
As above calculated under point 2 Additional Contribution margin per hour is positive, Therefore it is beneficial to accept the offer |
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Portsmouth Company makes upholstered furniture. Its only variable cost is direct materials. The demand for the...
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 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 constriant) in the production process is upholstery labor-hours. Information concerning three of Portsmouth's upholstered chairs appears below: Love Seat $1,272 $1,860$1,250 850 5 hours Recliner Sofa Selling price per unit Variable cost per unit Upholstery labor-hours per unit 900 1,200 $ 6 hours 12 hours Required 1. Portsmouth is considering paying its upholstery laborers...
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 Sofa Love Seat Selling price per unit $ 1,156 $ 1,805 $ 1,200 Variable cost per unit $ 750 $ 1,200 $ 850 Upholstery labor-hours per unit 7 hours 11 hours 5 hours Required: 1. Portsmouth...
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....
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 Sofa Love Seat Selling price per unit $ 1,400 $ 1,800 $ 1,500 Variable cost per unit $ 800 $ 1,200 $ 1,000 Upholstery labor-hours per unit 8 hours 10 hours 5 hours Required: 1. Portsmouth...
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 1,340 $ 700 $ 10 hours Sofa Love Seat 1,790 $ 1,575 1,350 $ 1,200 11 hours 5 hours Required: 1. Portsmouth...
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 1,340 $ 700 $ 10 hours Sofa Love Seat 1,790 $ 1,575 1,350 $ 1,200 11 hours 5 hours Required: 1. Portsmouth...
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 constriant) in the production process is upholstery labor-hours. Information concerning three of Portsmouth's upholstered chairs appears below: Recliner Sofa Love Seat Selling price per unit $ 1,298 $ 1,920 $ 1,175 Variable cost per unit $ 850 $ 1,150 $ 800 Upholstery labor-hours per unit 7 hours 14 hours 5 hours Required: 1. Portsmouth...
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 Sofa Love Seat Selling price per unit $ 1,362 $ 1,785 $ 1,625 Variable cost per unit $ 750 $ 1,200 $ 1,200 Upholstery labor-hours per unit 9 hours 13 hours 5 hours Required: 1. Portsmouth...
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 $ 1,346 $ 1,800 $ 1,525 $ 850 $ 1,200 $ 1,100 8 hours 10 hours 5 hours Required: 1. Portsmouth...