Simcoe Hotel currently launders all of its towels and sheets in the basement of the hotel. The company's accounting department has reported the following annual costs of laundering internally. Simcoe Hotel Laundry Production Costs For the Year Ended December 31, 2020 Direct Materials Direct Labour Housekeeping Supervisor Per kg 7,000 kg $5.00 $35,000 $10.00 $70,000 $10.00 $70,000 Depreciation of laundry equipment $2.00 $14,000 Allocated Fixed Costs Total Cost $7.00 $49,000 $34.00 $238,000 An external company has offered to process 7,000 kg of laundry per year at a price of $18 per kg. Also consider the following information Direct Labour $10.00 $70,000 Housekeeping Supervisor $10.00 $70,000 Depreciation of laundry equipment $2.00 $14,000 Allocated Fixed Costs Total Cost $7.00 $49,000 $34.00 $238,000 An external company has offered to process 7,000 kg of laundry per year at a price of $18 per kg. Also consider the following information: The laundry equipment has no salvage value and has no other use aside from processing the laundry. It cannot be sold. The fixed costs allocated to the laundry are common to the whole housekeeping department. The supervisor will take over duties in another department if the laundry is processed at the external company. If this is the case, the supervisor's annual salary will drop to $63,000. Should the company continue to process laundry internally or begin using the external company? Do not enter dollar signs or commas in the input boxes. Round all answers to 2 decimal places. Production Limestone Hotel Laundry Outsource Analysis Per ka Differential Cost Total Differential Cost (7.000 kal Direct Materials Limestone Hotel Laundry Outsource Analysis Production Cost Per kg Per kg Differential Cost Total Differential Cost (7,000 kg) In-house Outsource In-house Outsource $ $ $ $5.00 Direct Labour $10.00 Housekeeping $10.00 Supervisor Depreciation of $2.00 Laundry Equipment Allocated Fixed Costs $7.00 Outsource Price $ Housekeeping Supervisor $10.00 Depreciation of $2.00 Laundry Equipment Allocated Fixed Costs $7.00 Outsource Price Total Relevant Cost $34.00 The company should: English (en) -