Please Correct Answer With Explanation And Do not Give Solution in Image format Required:a. If Baldwin outsources the Legal Department, what is the maximum it can pay an outside vendor without increasing total costs?b. If Baldwin outsources the Personnel Department, what is the maximum it can pay an outside vendor without increasing total costs?c. If Baldwin outsources both the Personnel and the Legal Departments, what is the maximum it can pay an outside vendor withoutincreasing total costs?Complete this question by entering your answers in the tabs below.Required A Required BRequired CIf Baldwin outsources the Legal Department, what is the maximum it can pay an outside vendor without increasing totalcosts?Note: Do not round intermediate calculations.Maximum amount< Required ARequired B > Problem 11-64 (Algo) Reciprocal Cost Allocation-Outsourcing a Service Department (LO 11-1, 2)Baldwin Enterprises has two service departments, Personnel and Legal, and two operating divisions, Eastern and Western. Personnelcosts are allocated on the basis of employees and Legal costs are allocated on the basis of hours. A summary of Baldwin operationsfollows:Personnel120010,800$ 300,0005,400$ 1,200,000.Baldwin Enterprises estimates that the cost structure in its operations is as follows:Legal$ 47,000125,000Eastern$ 930,000342,000$ 1,272,000$ 172,000$ 26,000$ 210,000EmployeesHoursDepartment direct costsVariable costsFixed costsTotal costsAvoidable fixed costsPersonnel$155,000205,000$360,000$ 56,000Legal400$ 160,000EasternWestern401,800$ 790,000Western$ 566,000236,000$ 802,000$ 210,000

Outsourcing is the process of engaging a third party to execute services or generate commodities…

aldwin Enterprises has two service departments, Personnel and Legal, and two operating divisions, Eastern and Western. Personnel osts are allocated on the basis of employees and Legal costs are allocated on the basis of hours. A summary of Baldwin operations Ollows: Personnel 10,800 Employees Hours 120 5,400 Department direct costs $ 300,000 $ 160,000 $ 1,200,000 Baldwin Enterprises estimates that the cost structure in its operations is as follows: Variable costs Fixed costs Total costs Avoidable fixed Personnel $155,000 205,000 $360,000 Legal Legal $ 47,000 125,000 $ 172,000 Eastern Eastern $ 930,000 342,000 $1,272,000 Western 40 1,800 $ 790,000 Western $566,000 216,000 $ 802,000

aldwin Enterprises has two service departments, Personnel and Legal, and two operating divisions, Eastern and Western. Personnel osts are allocated on the basis of employees and Legal costs are allocated on the basis of hours. A summary of Baldwin operations Ollows: Personnel 10,800 Employees Hours 120 5,400 Department direct costs $ 300,000 $ 160,000 $ 1,200,000 Baldwin Enterprises estimates that the cost structure in its operations is as follows: Variable costs Fixed costs Total costs Avoidable fixed Personnel $155,000 205,000 $360,000 Legal Legal $ 47,000 125,000 $ 172,000 Eastern Eastern $ 930,000 342,000 $1,272,000 Western 40 1,800 $ 790,000 Western $566,000 216,000 $ 802,000

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter9: Responsibility Accounting And Decentralization

Section: Chapter Questions

Problem 6EA: As manager of department B in MarIeys Manufacturing, based on the costs you identified in the...

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