Refer to the facts in Exercise 11-26. Caro estimates that the variable costs in the Maintenance Department total $14,500, and in the Cafeteria variable costs total $16,000. Avoidable fixed costs in the Maintenance Department are $9,000.

Facts from Exercise 11-26

Required
If Caro outsources the Maintenance Department, what is the maximum it can pay an outside vendor without increasing total costs?

Transcribed Image Text:

Proportion of Services Used by Department Direct Costs Maintenance Cafeteria Machining Assembly Machining.... $99,000 Assembly....64,400 Maintenance Cafeteria.. 0,000 .32,000 0.5 0.1 0.3 0.1 0.2 0.8