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University Printers has two service departments (Maintenance and Personnel) and two operating departments (Printing and Developing). Management has decided to allkcate maintenance costs on the
University Printers has two service departments (Maintenance and Personnel) and two operating departments (Printing and Developing). Management has decided to allkcate 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 cach. The tollowing data appear in the company records for the current peniod ,000 Machine-hours Labor-hours Department diract costs 3,000 2 DOD $37,000 $48,750 334,000 1,000 600$37.00 University Printers estimates that the variable costs in the Personnel Department total S21.500 and in the Maintenance Department variable costs total S7,000. Avoidable fixed cosls in the Personnel Department are S6.000. Required If University Printers outsouces the Personnel Depatment functions, what is the maximum it can pay an outside vendor without Increasing total costs? (Do not round intermediate calculations.)
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