Baldwin Enterprises has two service departments, Personnel and Legal, and two operating divisions, Eastern and Western....

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Baldwin Enterprises has two service departments, Personnel and Legal, and two operating divisions, Eastern and Western. Personnel costs are allocated on the basis of employees and Legal costs are allocated on the basis of hours. A summary of Baldwin operations follows: Employees Hours Department direct costs Personnel Legal Eastern Western 0 40 120 40 10,800 $ 300,000 0 $ 160,000 5,400 $ 1,200,000 1,800 $ 790,000 Baldwin Enterprises estimates that the cost structure in its operations is as follows: Personnel $170,000 220,000 Variable costs Fixed costs Legal $ 50,000 128,000 Total costs Avoidable fixed costs $ 390,000 $ 59,000 $ 178,000 $ 29,000 Required: Eastern $ 960,000 348,000 $ 1,308,000 Western $ 569,000 239,000 $ 808,000 $ 240,000 $ 240,000 a. If Baldwin outsources the Legal Department, what is the maximum it can pay an outside vendor without increasing total costs? b. If Baldwin outsources the Personnel Department, what is the maximum it can pay an outside vendor without increasing total costs? c. If Baldwin outsources both the Personnel and the Legal Departments, what is the maximum it can pay an outside vendor without increasing total costs? Baldwin Enterprises has two service departments, Personnel and Legal, and two operating divisions, Eastern and Western. Personnel costs are allocated on the basis of employees and Legal costs are allocated on the basis of hours. A summary of Baldwin operations follows: Employees Hours Department direct costs Personnel Legal Eastern Western 0 40 120 40 10,800 $ 300,000 0 $ 160,000 5,400 $ 1,200,000 1,800 $ 790,000 Baldwin Enterprises estimates that the cost structure in its operations is as follows: Personnel $170,000 220,000 Variable costs Fixed costs Legal $ 50,000 128,000 Total costs Avoidable fixed costs $ 390,000 $ 59,000 $ 178,000 $ 29,000 Required: Eastern $ 960,000 348,000 $ 1,308,000 Western $ 569,000 239,000 $ 808,000 $ 240,000 $ 240,000 a. If Baldwin outsources the Legal Department, what is the maximum it can pay an outside vendor without increasing total costs? b. If Baldwin outsources the Personnel Department, what is the maximum it can pay an outside vendor without increasing total costs? c. If Baldwin outsources both the Personnel and the Legal Departments, what is the maximum it can pay an outside vendor without increasing total costs?