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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

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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 PersonnelPrinting Developing Machine-hours Labor-hours Department direct costs 1,000 1,000 3,000 2,000 $29,500 500 $17,000 $35,750 $47,350 University Printers estimates that the variable costs in the Personnel Department total $21,000 and in the Maintenance Department variable costs total $8,400. Avoidable fixed costs in the Personnel Department are $6,500 Required: If University Printers outsources the Personnel Department functions, what is the maximum it can pay an outside vendor without increasing total costs? (Do not round intermediate calculations.) Maximum Amount$

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