Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please provide answer for c with explanation Jenson College provides its own housekeeping services. The College director would like to outsource this service and has

Please provide answer for c with explanation

image text in transcribedimage text in transcribedimage text in transcribed
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 $4 Direct labour costs $27 Variable overhead $1 Total hours of housekeeping services per year 3,260 Total xed overhead $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, e.g.-15,000 or parenthesis, e.g. (15,000).) Net Income Number of hours: 3,260 In-house Outsource Increase (Decrease) Cleaning supplies to 13040 $ 0 to 13040 Direct labour 88020 0 88020 Variable overhead 3260 0 3260 Fixed costs 52440 26220 26220 Purchase price 0 166260 -166260 Total cost 156760 $ 192480 $ -35720Jenson College should not v outsource the services. Attempts: 1 of 1 used (b) 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, e.g. 125.) Jenson's indifference point hours

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Mylab Accounting With Pearson -- Access Card -- For Managerial Accounting

Authors: Karen W. Braun, Wendy M. Tietz

5th Edition

0134161645, 9780134161648

More Books

Students also viewed these Accounting questions

Question

Describe the options and trends in management education

Answered: 1 week ago