Calculate and compare the forecast total accounting costs in the year following MEXIT under the restructured in$-$house option $($A$)$; to assess which option will be most economical for Telford Engineering in the future.

Enter the accountancy department costs for Option A $($to the nearest $M$\text{'}000).$ For your answer only provide the first three numbers and do not include any symbols, for example, $"543".$

Retaining accountancy staff in$-$house, but operating with the reduced workforce

Staff members who resign leading up to MEXIT are not to be replaced, and the company will continue to operate the accountancy function in$-$house with a reduced staff level. Your salary will remain at $$70,000$ as you were recently appointed.

The retained accounting staff post$-$restructure, will be paid at $10\%$ more than their current salaries. To manage their additional responsibilities and to adopt new working practices, but an additional $25\%$ will be added to the total payroll costs $($after pay rises$)$

of the remaining accountancy department staff, due to the need for increased overtime and the costs of hiring temporary workers to cover peak times.

Note: The remaining staff left under the restructure Option, after the earlier redundancies, will be as follows:

Head of accounting $($unchanged salary$)+2$ Fully Qualified $($FQ$)$ Accountants $+3$ Part Qualified $($PQ$)$ Accountants $+4$ Accounting Technicians

Option B

Outsourcing

of payables, receivables, payroll and credit control. Long$-$term asset and treasury and cash management will remain in$-$house.

of their current annual salaries. Outsourcing would mean that $40\%$ of the other non$-$staff accounting department costs could be saved each year.

The retained skeleton staff, post$-$outsourcing, will be paid at $20\%$ more than their current salaries.

Note: The remaining staff to be retained under the Outsource Option will be as follows:

Head of Accounting $($unchanged salary$)+2$ Fully Qualified $($FQ$)$ Accountants and one Part Qualified $($PQ$)$ Accountant ROLES AND GRADES WITHIN THE ACCOUNTING DEPARTMENT TEAM $($POST$-$MEXIT BASED RESIGNATIONS$)$ NOTE $1$

Accountancy department staff grades and salary cost breakdown $($pre$-$resignations$)$

Head of accounting

Fully qualified $($FQ$)$

Part qualified $($PQ$)$

Accounting technicians $(T)$

Total staff members:

Number of staff