University Printers has two service departments (Maintenance and Personnel) and two operating departments (Printing and...
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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 PersonnelPrinting Developing Machine-hours Labor-hours Department direct costs 1,000 500 $37,000 $47.350 1,000 500 $15,500 3,000 2,000 $30,000 University Printers estimates that the variable costs in the Personnel Department total $19,250 and in the Maintenance Department variable costs total $8,300. Avoidable fixed costs in the Personnel Department are $5,500 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.) Answer is complete but not entirely correct. mum $ 24,750
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