BKF com provides banks access to sophisticated financial information and analysis via the web, enabling them to instantly evaluate both personal and commercial loan applications To better focus on its client services, BKF com is considering outsourcing some of its internal functions Its controller, Jenny Lee, suggests starting with the company's internal email system She recently attended a conference and learned that GTE and NBC outsource their email function to companies such as Google and Yahoo Lee began her analysis by identifying the total costs related to last month's in house email operation, when there were 4,000 employee mailboxes Variable Costs (varies with mailboxes) Email license $22,400 Virus protection license 6,400 Miscellaneous 10,400 Fixed Costs Computer hardware 41,600 Total costs $80,800 Lee analyzed the computer hardware costs, identifying its three components $17,056 were allocated costs that will continue even if the email system is abandoned $7,072 were non personnel direct costs that will be avoided if the email system is abandoned $17,472 were the monthly salaries for two, equally paid interns who worked only on the email system Mail com, a leading provider of internet messaging outsourcing services, has offered to host BKF com's email function for $11 40 per mailbox BKF com will still need to pay the virus protection license fee and one of the interns to maintain the virus protection software A company has agreed to pay BKF com $4,100 a month to use the computer storage space that will become available if BKF com outsources its email function Finally, Lee estimates that 4,110 mailboxes will be required per month next year REQUIRED 6 tries By how much will BKF com's monthly profits change if they decide to outsource its email function to Mail com instead of managing the service internally Note if the buy costs are less than the make costs, enter the difference as a positive number if the make costs are less than the buy costs, enter the difference as a negative number, using the minus sign instead of parentheses

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 29, 2024

BKF.com provides banks access to sophisticated financial information and analysis via the web, enabling them to instantly evaluate both personal and commercial loan applications. To

BKF.com provides banks access to sophisticated financial information and analysis via the web, enabling them to instantly evaluate both personal and commercial loan applications. To better focus on its client services, BKF.com is considering outsourcing some of its internal functions. Its controller, Jenny Lee, suggests starting with the company's internal email system. She recently attended a conference and learned that GTE and NBC outsource their email function to companies such as Google and Yahoo. Lee began her analysis by identifying the total costs related to last month's in-house email operation, when there were 4,000 employee mailboxes:

Variable Costs (varies with mailboxes)
Email license	$22,400
Virus protection license	6,400
Miscellaneous	10,400
Fixed Costs
Computer hardware	41,600
Total costs	$80,800

Lee analyzed the computer hardware costs, identifying its three components:

$17,056 were allocated costs that will continue even if the email system is abandoned.
$7,072 were non-personnel direct costs that will be avoided if the email system is abandoned.
$17,472 were the monthly salaries for two, equally paid interns who worked only on the email system.

Mail.com, a leading provider of internet messaging outsourcing services, has offered to host BKF.com's email function for $11.40 per mailbox. BKF.com will still need to pay the virus protection license fee and one of the interns to maintain the virus protection software.

A company has agreed to pay BKF.com $4,100 a month to use the computer storage space that will become available if BKF.com outsources its email function.

Finally, Lee estimates that 4,110 mailboxes will be required per month next year.

REQUIRED [6 tries] By how much will BKF.com's monthly profits change if they decide to outsource its email function to Mail.com instead of managing the service internally? [Note: if the buy costs are less than the make costs, enter the difference as a positive number; if the make costs are less than the buy costs, enter the difference as a negative number, using the minus sign instead of parentheses.]