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.) Please see picture for full problem! University Printers has two service departments (Maintenance and Personnel) and two operating departments (Printing andDeveloping). Management has decided to allocate maintenance costs on the basis of machine-hours In each department andpersonnel costs on the basis of labor-hours worked by the employees in each.The following data appear in the company records for the current perlod:MaintenancePersonnelPrinting1,e0e500$46, 300Developing3,8082, e00$31,588Machine-hours1,e00Labor-hours500Departnent direct costs$15,800$36, 500University Printers estimates that the varlable costs In the Personnel Department total $20,000 and in the Malntenance Departmentvarlable costs total $7,300. Avoldable fixed costs in the Personnel Department are $5,600.

Outsourcing is the process of acquiring goods and services from another party specially foreign…

Answered: Iniversity Printers has two service…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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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.)

Please see picture for full problem!

University 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
personnel costs on the basis of labor-hours worked by the employees in each.
The following data appear in the company records for the current perlod:
Maintenance
Personnel
Printing
1,e0e
500
$46, 300
Developing
3,808
2, e00
$31,588
Machine-hours
1,e00
Labor-hours
500
Departnent direct costs
$15,800
$36, 500
University Printers estimates that the varlable costs In the Personnel Department total $20,000 and in the Malntenance Department
varlable costs total $7,300. Avoldable fixed costs in the Personnel Department are $5,600.

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