Manzano Bank has two operating departments (Branches and Electronic) and three service departments (Processing, Administration, and Maintenance). During November, the following costs and service department usage ratios were recorded:

		Using Department
Supplying
Department		Processing				Administration				Maintenance			Branches				Electronic
Processing			0				50	%			0			10	%			40	%
Administration			0				0				0			60	%			40	%
Maintenance			10	%			20	%			0			20	%			50	%
Direct cost		$	121,000				$750,000				$330,000		$	6,000,000			$	2,500,000

The cost accountant at Manzano Bank estimates that the cost structures in their departments are as follows:

	Processing			Administration			Maintenance			Branches			Electronic
Variable costs	$	84,000		$	237,000		$	184,000		$	2,800,000		$	1,100,000
Fixed costs		37,000			513,000			146,000			3,200,000			1,400,000
Total costs	$	121,000		$	750,000		$	330,000		$	6,000,000		$	2,500,000
Avoidable fixed costs	$	11,000		$	402,000		$	125,000		$	2,105,000		$	930,000

Required:

(a)

If Manzano outsources the Processing Department, what is the maximum they can pay an outside vendor without increasing total costs?

(b)

If Manzano outsources the Administration Department, what is the maximum they can pay an outside vendor without increasing total costs?

(c)	If Manzano outsources the Maintenance Department, what is the maximum they can pay an outside vendor without increasing total costs?