Refer to the facts in Problem 11-54. The cost accountant at Great Eastern Credit Union estimates that

Question:

Refer to the facts in Problem 11-54. The cost accountant at Great Eastern Credit Union estimates that the cost structures in its departments are as follows:

                 

Required
a. If GECU outsources the Processing Department, what is the maximum it can pay an outside vendor without increasing total costs?
b. If GECU outsources the Administration Department, what is the maximum it can pay an outside vendor without increasing total costs?
c. If GECU outsources the Maintenance Department, what is the maximum it can pay an outside vendor without increasing total costs?

Data From Problem 11-54:

Great Eastern Credit Union (GECU) has two operating departments (Branches and Electronic) and three service departments (Processing, Administration, and Maintenance). During July, the following costs and service department usage ratios were recorded:

                        

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Related Book For  book-img-for-question

Fundamentals of Cost Accounting

ISBN: 978-1259565403

5th edition

Authors: William Lanen, Shannon Anderson, Michael Maher

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