Jenson 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 $30

Variable overhead $2

Total hours of housekeeping services per year 3,020

Total fixed overhead $45,080

Determine whether Jenson College should outsource housekeeping, assuming 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, e.g.-15,000 or parenthesis, e.g. (15,000).)

Number of hours: 3,020In-houseOutsourceNet Income Increase (Decrease)

Cleaning supplies$ $ $

Direct labour

Variable overhead

Fixed costs

Purchase price

Total cost$ $ $

Jenson College shouldshould not outsource the services.

At what level of service (in hours) would Jenson generally be indifferent between providing housekeeping services or outsourcing them, assuming that 50% of fixed costs can be eliminated? (Round answer to 0 decimal places, e.g. 125.)

Jenson's indifference pointhours