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 period: Maintenance Personnel Printing Developing 3,000 2,000 $29,500 Machine-hours 1,000 1,000 Labor-hours 500 500 Department direct costs $14,000 $38,500 $43,500 University Printers estimates that the variable costs in the Personnel Department total $17,750 and in the Maintenance Department variable costs total $8,100. Avoidable fixed costs in the Personnel Department are $5,60. Required: 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.)

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 period: Maintenance Personnel Printing Developing 3,000 2,000 $29,500 Machine-hours 1,000 1,000 Labor-hours 500 500 Department direct costs $14,000 $38,500 $43,500 University Printers estimates that the variable costs in the Personnel Department total $17,750 and in the Maintenance Department variable costs total $8,100. Avoidable fixed costs in the Personnel Department are $5,60. Required: 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.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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