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:

University Printers estimates that the variable costs in the Personnel Department total $18,000 and in the Maintenance Department variable costs total $9,200. Avoidable fixed costs in the Personnel Department are $6,800.

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.)

Machine-hours Labor-hours Department direct costs Maintenance Personnel Printing Developing 1,000 3,000 1,000 2,000 500 500 $16,500 $38,500 $45,600 $28,500