ave Problem 11-65 (Static) Reciprocal Cost Allocation - Outsourcing a Service Department (LO 11-4,5) BluStar Company has two service departments, Administration and Accounting, and two operating departments, Domestic and International Administration costs are allocated on the basis of employees, and Accounting costs are allocated on the basis of number of transactions. A summary of BluStar operations follows. Administration Accounting Domestic International Employees 180 Transactions 25,000 20,000 30,000 Department direct costs $360,000 $144,000 $936,000 $3,600,000 25 45 BluStar estimates that the cost structure in its operations is as follows. Administration Accounting Domestic Variable costs $150,000 $ 36,000 $678,000 Fixed costs 210,000 108,000 258,080 Total costs $360,000 $144,000 $936,000 Avoidable fixed costs $ 60,000 $ 18,000 $120,000 International $2,562,000 1,038,000 $3,600,000 $ 675,000 Required: If Rh Star outsources the Administration Department what is the maximum It can pay an outside vendor without increasing total Saved Help 5 Fixed costs Total costs Avoidable fixed costs 210, $360,000 $ 60,000 2015, $144,00 5 18,000 050, $936,000 $120,000 1,01 $3,600,000 5 675,000 Required: a. If BluStar outsources the Administration Department, what is the maximum it can pay an outside vendor without increasing total costs? b. If BluStar outsources the Accounting Department, what is the maximum it can pay an outside vendor without increasing total co c. If BluStar outsources both the Administration and the Accounting Departments, what is the maximum it can pay an outside vend without increasing total costs? Complete this question by entering your answers in the tabs below. Required A Required B Required If BluStar outsources the Administration Department, what is the maximum it can pay an outside vendor without increasing total costs? (Do not round Intermediate calculations. Maximum amount Required B >