An online retailer must decide if it should insource or outsource its website maintenance. The company estimates that 4,000 hours per year will be needed to maintain its website. To insource maintenance requires $25,000 in fixed costs per year and $27/hour in variable costs. Quotes from suppliers show that website maintenance can be outsourced for $35 per hour. Does the cost analysis support insourcing or outsourcing website maintenance?
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