Canyon Trails is studying whether to outsource its Human Resources (H/R) activities. Salaried professionals who earn $460,000 would be terminated; in contrast, administrative assistants who earn $142,000 would be transferred elsewhere in the organization. Miscellaneous departmental overhead (e.g., supplies, copy charges, overnight delivery) is expected to decrease by $36,000, and $23,000 of corporate overhead, previously allocated to Human Resources, would be picked up by other departments. If Canyon Trails can secure needed H/R services locally for $480,000, how much would the company benefit by outsourcing?

Multiple Choice

• $16,000.

• $49,000.

• $158,000.

• $191,000.

• Nothing, as it would be cheaper to keep the department open.