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At what level of service (in hours) would Waterway generally be indifferent between providing housekeeping services or outsourcing them, assuming that 50% of fixed costs
At what level of service (in hours) would Waterway generally be indifferent between providing housekeeping services or outsourcing them, assuming that 50% of fixed costs can be eliminated? (Round answer to 0 decimal places, eg. 125.) Waterway College provides its own housekeeping services. The College director would like to outsource this service and has found a company that will provide the service for $50 per hour. The following information has been collected about the cost per hour to the college for performing its own housekeeping services: Cost per hour of service: Cleaning supplies $4 Direct labour costs $27 Variable overhead Total hours of housekeeping services per year 3,190 Total fixed overhead $51,480 (a) - Your answer is partially correct. Determine whether Waterway College should outsource housekeeping, assuming that 50% of fixed costs can be eliminated if the service is outsourced. (If an amount reduces the net income then enter with a negative sign preceding the number, eg.15,000 or Waterway College outsource the services
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