Iniversity Printers has two service departments (Maintenance and Personnel) and two operating departments (Printing and Developing). Management has decided to allocate maintenance costs on the basis of machine-hours in each department and ersonnel costs on the basis of labor-hours worked by the employees in each. he following data appear in the company records for the current period: Maintenance Personnel Printing Developing 3,000 2,e0e $31, se0 Machine-hours 1,000 1,00e see Labor-hours Department direct costs see $15,000 $36, 500 $46, 300 Iniversity Printers estimates that the variable costs in the Personnel Department total $20.000 and In the Maintenance Department artable costs total $7300. Avoidable fixed costs in the Personnel Department are $5.600.
Iniversity Printers has two service departments (Maintenance and Personnel) and two operating departments (Printing and Developing). Management has decided to allocate maintenance costs on the basis of machine-hours in each department and ersonnel costs on the basis of labor-hours worked by the employees in each. he following data appear in the company records for the current period: Maintenance Personnel Printing Developing 3,000 2,e0e $31, se0 Machine-hours 1,000 1,00e see Labor-hours Department direct costs see $15,000 $36, 500 $46, 300 Iniversity Printers estimates that the variable costs in the Personnel Department total $20.000 and In the Maintenance Department artable costs total $7300. Avoidable fixed costs in the Personnel Department are $5.600.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1.) If University Printers outsources the Personnel Department functions, what is the maximum it can pay an outside vendor without increasing total costs? (Do not round intermediate calculations.)
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