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AP7-2 (a,b) Incremental Analysis of Outsourcing Decision [LO 1, 2, 4] Oakland College is considering outsourcing grounds maintenance. In this regard, Oakland has received a
AP7-2 (a,b) Incremental Analysis of Outsourcing Decision [LO 1, 2, 4] Oakland College is considering outsourcing grounds maintenance. In this regard, Oakland has received a bid from Highline Grounds Maintenance for $307,640 per year. Highline states that its bid will cover all services and planting materials required to "keep Oakland's grounds in a condition comparable to prior years." Oakland's cost for grounds maintenance in the preceding year were $316,290 as follows: Salary of three full-time gardeners $200,300 Plant materials 85,100 Fertilizer 7,130 Fuel 9,870 Depreciation of tractor, mowers, and other miscellaneous equipment 13,890 Total $316,290 If Oakland College outsources maintenance, it will be able to sell equipment for $31,630, and the three gardeners will be laid off. Analyze the one-year financial impact of outsourcing grounds maintenance. $ How will savings in the second year differ from those in year 1? $ IncreaseDecrease Click here if you would like to Show Work for this
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