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Tamarisk college provides its own housekeeping services. The college director would like to outsource this service and has found a company that will provide the

Tamarisk 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 performing its own housekeeping services: Cost per hour of services: Cleaning supplies : $3 Direct labour costs: $28 Variable overhead: $2 Total hours of housekeeping services per year: 3,180 Total fixed overhead: $52,920 Determine whether Tamarisk college should outsource housekeeping assuming that 50% of fixed cost can be eliminated if the services it outsourced

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