pwad
Badges: 1
Rep:
?
#1
Report Thread starter 7 years ago
#1
I don't understand how to find the solution to these problems:


28. Torrey Pines is studying whether to outsource its Human Resources (H/R) activities. Salaried professionals who earn $390,000 would be terminated; in contrast, administrative assistants who earn $120,000 would be transferred elsewhere in the organization. Miscellaneous departmental overhead (e.g., supplies, copy charges, long distance) is expected to decrease by $30,000, and $25,000 of corporate overhead, previously allocated to Human Resources, would be picked up by other departments. If Torrey Pines can secure needed H/R services locally for $410,000, how much would the company benefit by outsourcing?
A. $10,000.
B. $35,000.
C. $130,000.
D. $155,000.
E. None, as it would be cheaper to keep the department open.

The answer is A



30. Maddox, a division of Stanley Enterprises, currently performs computer services for various departments of the firm. One of the services has created a number of operating problems, and management is exploring whether to outsource the service to a consultant. Traceable variable and fixed operating costs total $80,000 and $25,000, respectively, in addition to $18,000 of corporate administrative overhead allocated from Stanley. If Maddox were to use the outside consultant, fixed operating costs would be reduced by 70%. The irrelevant costs in Maddox's outsourcing decision total:
A. $17,500.
B. $18,000.
C. $25,000.
D. $25,500.
E. some other amount.

The answer is D
and that's why I'm confused b/c I know your not supposed to count the fixed costs so why isn't it 25,000?:confused:
0
reply
pwad
Badges: 1
Rep:
?
#2
Report Thread starter 7 years ago
#2
Nobody taken accounting before?
0
reply
Rese
Badges: 1
Rep:
?
#3
Report 6 months ago
#3
25,000 * 30% = 7500 7500 + 18000 = 25500
Last edited by Rese; 5 months ago
0
reply
X

Quick Reply

Attached files
Write a reply...
Reply
new posts
Back
to top
Latest
My Feed

See more of what you like on
The Student Room

You can personalise what you see on TSR. Tell us a little about yourself to get started.

Personalise

Regarding Ofqual's most recent update, do you think you will be given a fair grade this summer?

Yes (80)
27.4%
No (212)
72.6%

Watched Threads

View All
Latest
My Feed