Splish 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 $$49$ 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

$$3$

Direct labour costs

$$27$

Variable overhead

$$1$

Total hours of housekeeping services per year $,3,040$

Total fixed overhead $$55,080$

$($a$)$

Determine whether Splish 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, eg$.(15,000).$ While alternate approaches are possible, irrelevant fixed costs should be included in both aptions when solving this problem.$)$

Number of hours:

$3,040$ In$-$house

Net Income

Cleaning supplies

$

$

Outsource Increase $($Decrease$)$

Direct labour

Variable overhead

Fixed costs

Purchase price

Total cost

Splish College

outsource the services.