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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

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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 $51 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 Direct labour costs Variable overhead Total hours of housekeeping services per year Total fixed overhead $4 $27 $1 3,260 $52.440 (a) Your answer has been saved. See score details after the due date. 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, eg-15,000 or parenthesis, es. (15,000)) Number of hours: Net Income 3,260 In-house Outsource Increase (Decrease) Cleaning supplies 13,040 Direct labour 88,020 Variable overhead 3,260 Fixed costs 52.440 26.220 26,220 Purchase price $ $ $ 13,040 88,020 3.260 166,260 166.200 Total cost $ 156,760 192.480 $ 35,720 Jenson College should 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 O decimal places, eg. 125.) Jenson's indifference point hours

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