Question
Canyon Trails is studying whether to outsource its Human Resources (H/R) activities. Salaried professionals who earn $410,000 would be terminated; in contrast, administrative assistants who
Canyon Trails is studying whether to outsource its Human Resources (H/R) activities. Salaried professionals who earn $410,000 would be terminated; in contrast, administrative assistants who earn $131,000 would be transferred elsewhere in the organization. Miscellaneous departmental overhead (e.g., supplies, copy charges, overnight delivery) is expected to decrease by $32,000, and $21,000 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 $430,000, how much would the company benefit by outsourcing?
A. $143,000.
B. $174,000.
C. Nothing, as it would be cheaper to keep the department open.
D. $43,000.
E. $12,000.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started