Problem $11-64($Static$)$ Reciprocal Cost Allocation$-$Outsourcing a Service Department $($LO $11-1,2)$

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:

Baldwin Enterprises estimates that the cost structure in its operations is as follows:

Required:

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?