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Question 0 2 / 0 3 Calculate and compare the forecast total accounting costs in the year following MEXIT under the outsource option ( B
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Calculate and compare the forecast total accounting costs in the year following MEXIT under the outsource option B; to assess which option will be most economical for Telford Engineering in the future.
Enter the accountancy department costs for Option B to the nearest $M For your answer only provide the first three numbers and do not include any symbols, for example, "Option B
Outsourcing
Telford Engineering has identified a global business services partner offshore. The annual cost of outsourcing the accounting function per annum is forecast to be $ The GBS Company will take over the highly systemised and transactional operations
of payables, receivables, payroll and credit control. Longterm asset and treasury and cash management will remain inhouse.
Outsourcing would take place immediately following MEXIT in about one years time and annual outsourcing costs are estimated to remain constant over time. The total cost of making the staff redundant under the outsource option is estimated to be
of their current annual salaries. Outsourcing would mean that of the other nonstaff accounting department costs could be saved each year.
The retained skeleton staff, postoutsourcing, will be paid at more than their current salaries.
Note: The remaining staff to be retained under the Outsource Option will be as follows:
Head of Accounting unchanged salary Fully Qualified FQ Accountants and one Part Qualified PQ Accountant
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