Torrey Pines is studying whether to outsource its Human Resources (H/R) activities. Salaried professionals who...
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Torrey Pines is studying whether to outsource its Human Resources (H/R) activities. Salaried professionals who earn $390,000 would be terminated; in contrast, administrative assistants who earn $153,000 would be transferred elsewhere in the organization. Miscellaneous departmental overhead (e.g., supplies, copy charges, overnight delivery) is expected to decrease by $34,000, and $28,000 of corporate overhead, previously allocated to Human Resources, would be picked up by other departments. If Torrey Pines can secure needed H/R services locally for $410,000, how much would the company benefit by outsourcing?
$14,000.
$40,000.
$167,000.
$193,000.
Nothing, as it would be cheaper to keep the department open.
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