Express Delivery Company $($EDC$)$ is considering outsourcing its Payroll Department to a payroll processing company for an annual fee of $$222,800.$ An internally prepared report summarizes the Payroll Department$$s annual operating costs as follows:

Supplies $ $32,800$

Payroll clerks$$ salaries $122,800$

Payroll supervisor$$s salary $60,800$

Payroll employee training expenses $12,800$

Depreciation of equipment $22,800$

Allocated share of common building operating costs $17,800$

Allocated share of common administrative overhead $30,800$

Total annual operating cost $ $300,600$

EDC currently rents overflow office space for $$38,800$ per year. If the company closes its Payroll Department, the employees occupying the rented office space could be brought in$-$house and the lease agreement on the rented space could be terminated with no penalty.

If the Payroll Department is outsourced the payroll clerks will not be retained; however, the supervisor would be transferred to the company$$s Human Resource Management Department. As a result of this transfer, the company would discontinue its efforts to hire a new Human Resource Manager that it expected to pay an annual salary of $$58,800.$

The Payroll Department$$s equipment would be transferred to other departments within the company to replace outdated equipment that would be recycled for zero salvage value.

Required:

What is the financial advantage $($disadvantage$)$ of outsourcing the Payroll Department?