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Splish College provides its own housekeeping services. The College director would like to outsource this service and has found a company that will provide the service for $$49$ per hour. The following information has been collected about the cost per hour to the college for performing its own housekeeping services:

Cost per hour of service:

Cleaning supplies

$$3$

Direct labour costs

$$27$

Variable overhead

$$1$

Total hours of housekeeping services per year

$3,040$

Total fixed overhead

$$55,080$

$($a$)$

Vour answer is partially correct

Determine whether Splish College should outsource housekeeping, sssuming that $50\%$ of fixed costs can be eliminated if the service is outsourced. $($If an amount reduces the net income then enter with a negative sign preceding the number, ey$-15,000$ or parenthesis, eg $(15,000).$ While alternate approaches are possible, irrelevont fixed costs should be included in both options when solving this problem$)$

Net Income Increase $($Decrease$)$ eaning SL rect labo rriable ov red cost irchase tal cost

Splish College outsource the services.

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