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Manzano Bank has two operating departments (Branches and Electronic) and three service departments (Processing, Administration, and Maintenance). During November, the following costs and service department usage ratios were recorded:

		Using Department
Supplying
Department		Processing				Administration				Maintenance			Branches				Electronic
Processing			0				50	%			0			10	%			40	%
Administration			0				0				0			60	%			40	%
Maintenance			10	%			20	%			0			20	%			50	%
Direct cost		$	125,000				$748,000				$331,000		$	6,500,000			$	2,450,000

The cost accountant at Manzano Bank estimates that the cost structures in their departments are as follows:

	Processing			Administration			Maintenance			Branches			Electronic
Variable costs	$	79,000		$	243,000		$	181,000		$	2,600,000		$	1,100,000
Fixed costs		46,000			505,000			150,000			3,900,000			1,350,000
Total costs	$	125,000		$	748,000		$	331,000		$	6,500,000		$	2,450,000
Avoidable fixed costs	$	12,000		$	410,000		$	122,000		$	2,345,000		$	900,000

Required:

(a)	If Manzano outsources the Processing Department, what is the maximum they can pay an outside vendor without increasing total costs? (Omit the "$" sign in your response.)

Maximum amount

$

(b)	If Manzano outsources the Administration Department, what is the maximum they can pay an outside vendor without increasing total costs? (Omit the "$" sign in your response.)

Maximum amount

$

(c)	If Manzano outsources the Maintenance Department, what is the maximum they can pay an outside vendor without increasing total costs? (Omit the "$" sign in your response.)

Maximum amount

$

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