Refer to Problems 11.47 and 11.48. Insecurity Protection Services hired an engineering consulting firm sie :a d to perform an engineering estimate of the accounting department’s costs. The firm identified the follow- (LO 5)

ing cost estimates based on information for the current period:

Facilities costs (per MONTH) oo...c ee $40,000 BOVCMCCKOIOCESSING wereenratet ee ns 5.00 per paycheck Customer account maintenance .............0608 50.00 per account SpeciaiainalySescmaienem ryte arweceaniye 2,500 per analysis Required

a. Assuming the following level of cost-driver volume for a month, what is the accounting department’s estimated costs of doing business?

1,000 paychecks processed 200 customer accounts maintained 3 special analyses

b. Insecurity Protection Services is considering outsourcing the processing of all paychecks.

Compared to your answer in requirement (a), how much would the accounting department save by outsourcing payroll (before considering the cost of outsourcing)?