IV. Memorial Hospital has been hit with a number of complaints about its food service from patients, employees, and cafeteria customers. These complaints, coupled with a very tight local labor market, have prompted the organization to contact Nationwide Institutional Food Service (NIFS) about the possibility of an outsourcing arrangement. The hospital's business office h as provided the following information for food service for year just ended: food costs, 890,000; labor, $85,000; variable overhead, $35,000; Conversations with NIFS personnel revealed the following information: fixed hospital overhead, $60,000; and cafeteria food sales, $80,000. NIFS will charge Memorial Hospital $14 per day for each patient serv Note: This figure has been "marked up" by NIFS to reflect the firm's cost of operating the hospital cafeteria. The hospital's 250-bed facility operates throughout the year (assuming 6 days) and typically has an average occupancy rate of 70%. Labor is the primary driver for variable overhead. If an outsourcing agreement is reached, hospital labor costs will drop by 90%. NIFS plans to use the hospital's facilities for meal preparation. Cafeteria food sales are expected to increase by 15% because NIFS will offer an improved menu selection. ed. . Required: A. Should Memorial Hospital outsource its food-service operation to NIFS? What factors, other than dollars, should the hospital consider before making the final decision? B