University Printers has two service departments (Maintenance andPersonnel) and two operating departments (Printing and Developing).Management has decided to allocate maintenance costs on the basisof machine-hours in each department and personnel costs on thebasis of labor-hours worked by the employees in each.
The following data appear in the company records for the currentperiod:
Maintenance
Personnel
Printing
Developing
Machine-hours
—
1,000
1,000
3,000
Labor-hours
500
—
500
2,000
Departmentdirect costs
$
14,000
$
38,750
$
46,650
$
31,500
University Printers estimates that the variable costs in thePersonnel Department total $15,500 and in the MaintenanceDepartment variable costs total $7,600. Avoidable fixed costs inthe Personnel Department are $5,900.
Required:
If University Printers outsources the Personnel Departmentfunctions, what is the maximum it can pay an outside vendor withoutincreasing total costs? (Do not round intermediatecalculations.)
“Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!”
What Students Are Saying About Us
.......... Customer ID: 12*** | Rating: ⭐⭐⭐⭐⭐"Honestly, I was afraid to send my paper to you, but splendidwritings.com proved they are a trustworthy service. My essay was done in less than a day, and I received a brilliant piece. I didn’t even believe it was my essay at first 🙂 Great job, thank you!"
.......... Customer ID: 14***| Rating: ⭐⭐⭐⭐⭐
"The company has some nice prices and good content. I ordered a term paper here and got a very good one. I'll keep ordering from this website."
