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University Printers has two service departments (Maintenance and Personnel) and two operating departments (Printing and Developing). Management has decided to allocate maintenance costs on

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University Printers has two service departments (Maintenance and Personnel) and two operating departments (Printing and Developing). Management has decided to allocate maintenance costs on the basis of machine-hours in each department and personnel costs on the basis of labor-hours worked by the employees in each. The following data appear in the company records for the current period: Maintenance Machine-hours Personnel 1,000 Printing 1,000 Developing 3,000 Labor-hours 500 500 Department direct costs $15,500 $35,500 $47,000 2,000 $30,000 University Printers estimates that the variable costs in the Personnel Department total $20,750 and in the Maintenance Department variable costs total $7,000. Avoidable fixed costs in the Personnel Department are $6,700. Required: If University Printers outsources the Personnel Department functions, what is the maximum it can pay an outside vendor without increasing total costs? (Do not round intermediate calculations.) Maximum Amount

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