Baldwin Enterprises has two service departments, Personnel and Legal, and two operating divisions, Eastern and Western....

Transcribed Image Text:

Baldwin Enterprises has two service departments, Personnel and Legal, and two operating divisions, Eastern and Western. Personnel costs are allocated on the basis of employees and Legal costs are allocated on the basis of hours. A summary of Baldwin operations follows: Employees Hours Personnel Legal Eastern Western 40 10,800 120 5,400 40 $ 300,000 $ 160,000 $ 1,200,000 1,800 $ 790,000 Department direct costs Baldwin Enterprises estimates that the cost structure in its operations is as follows: Variable costs Fixed costs Personnel $220,000 270,000 Legal $ 60,000 138,000 Total costs $ 490,000 Avoidable fixed costs $ 69,000 $ 198,000 $ 39,000 Required: Eastern $ 1,060,000 368,000 $ 1,428,000 $ 340,000 Western $ 579,000 249,000 $ 828,000 $ 340,000 a. If Baldwin outsources the Legal Department, what is the maximum it can pay an outside vendor without increasing total costs? b. If Baldwin outsources the Personnel Department, what is the maximum it can pay an outside vendor without increasing total costs? c. If Baldwin outsources both the Personnel and the Legal Departments, what is the maximum it can pay an outside vendor without increasing total costs? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B Required C If Baldwin outsources the Legal Department, what is the maximum it can pay an outside vendor without increasing total costs? Note: Do not round intermediate calculations. Maximum amount $ 121,000 < Required A Required B > Required: a. If Baldwin outsources the Legal Department, what is the maximum it can pay an outside vendor without increasing total costs? b. If Baldwin outsources the Personnel Department, what is the maximum it can pay an outside vendor without increasing total costs? c. If Baldwin outsources both the Personnel and the Legal Departments, what is the maximum it can pay an outside vendor without increasing total costs? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B Required C If Baldwin outsources the Personnel Department, what is the maximum it can pay an outside vendor without increasing total costs? Note: Do not round intermediate calculations. Maximum amount $ 231,000 < Required A Required C > Baldwin Enterprises has two service departments, Personnel and Legal, and two operating divisions, Eastern and Western. Personnel costs are allocated on the basis of employees and Legal costs are allocated on the basis of hours. A summary of Baldwin operations follows: Employees Hours Personnel Legal Eastern Western 40 10,800 120 5,400 40 $ 300,000 $ 160,000 $ 1,200,000 1,800 $ 790,000 Department direct costs Baldwin Enterprises estimates that the cost structure in its operations is as follows: Variable costs Fixed costs Personnel $220,000 270,000 Legal $ 60,000 138,000 Total costs $ 490,000 Avoidable fixed costs $ 69,000 $ 198,000 $ 39,000 Required: Eastern $ 1,060,000 368,000 $ 1,428,000 $ 340,000 Western $ 579,000 249,000 $ 828,000 $ 340,000 a. If Baldwin outsources the Legal Department, what is the maximum it can pay an outside vendor without increasing total costs? b. If Baldwin outsources the Personnel Department, what is the maximum it can pay an outside vendor without increasing total costs? c. If Baldwin outsources both the Personnel and the Legal Departments, what is the maximum it can pay an outside vendor without increasing total costs? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B Required C If Baldwin outsources the Legal Department, what is the maximum it can pay an outside vendor without increasing total costs? Note: Do not round intermediate calculations. Maximum amount $ 121,000 < Required A Required B > Required: a. If Baldwin outsources the Legal Department, what is the maximum it can pay an outside vendor without increasing total costs? b. If Baldwin outsources the Personnel Department, what is the maximum it can pay an outside vendor without increasing total costs? c. If Baldwin outsources both the Personnel and the Legal Departments, what is the maximum it can pay an outside vendor without increasing total costs? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B Required C If Baldwin outsources the Personnel Department, what is the maximum it can pay an outside vendor without increasing total costs? Note: Do not round intermediate calculations. Maximum amount $ 231,000 < Required A Required C >