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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: Machine-hours Labor-hours Department direct costs Maintenance Personnel 1,000 Printing Developing 500 $5,000 1,000 500 3,000 2,000 $12,000 $15,000 $10,000 University Printers estimates that the variable costs in the Personnel Department total $7,000 and in the Maintenance Department variable costs total $3,000. Avoidable fixed costs in the Personnel Department are $4,000. 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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