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 Personnel Printing Developing

Machine-hours 1,000 1,000 3,000

Labor-hours 500 500 2,000

Department direct costs $ 12,000 $ 38,000 $ 49,100 $ 28,500

University Printers estimates that the variable costs in the Personnel Department total $17,000 and in the Maintenance Department variable costs total $8,600. 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?