Question
The cost accountant at Great Eastern Credit Union estimates that the cost structures in its departments are as follows. Processing Administration Maintenance Branches Electronic Variable
The cost accountant at Great Eastern Credit Union estimates that the cost structures in its departments are as follows. Processing Administration Maintenance Branches Electronic Variable costs $ 59,000 $ 158,000 $ 134,000 $ 1,850,000 $ 1,150,000 Fixed costs 34,000 382,000 94,000 3,000,000 1,200,000 Total costs $ 93,000 $ 540,000 $ 228,000 $ 4,850,000 $ 2,350,000 Avoidable fixed costs $ 8,000 $ 283,000 $ 80,000 $ 700,000 $ 620,000 Required: a. If GECU outsources the Processing Department, what is the maximum it can pay an outside vendor without increasing total costs? b. If GECU outsources the Administration Department, what is the maximum it can pay an outside vendor without increasing total costs? c. If GECU outsources the Maintenance Department, what is the maximum it can pay an outside vendor without increasing total costs?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started