Item$2$

$2\mathrm{.}5$

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Problem $10-2($Algo$)$

An online retailer must decide if it should insource or outsource its Website maintenance. The company estimates that $4,800$ hours per year will be needed to maintain its Website. To insource maintenance requires $$40,000$ in fixed costs per year and $$26/$hour in variable costs. Quotes from suppliers show that Website maintenance can be outsourced for $$39$ per hour.

a$.$ Compute the total annual cost for insourcing and outsourcing the maintenance.

b$.$ Which option would you prefer?

multiple choice

Insource

Outsource