Answer the following: Granville Community College is considering outsourcing the

Question

Answer the following:

Granville Community College is considering outsourcing the maintenance of its buildings and other facilities to an outside firm for $300,000 per year. The 2015 budget is as follows Make an assumption that there are 4 workers and 1 supervisor in the firm. The total cost per year of the insourcing option is (Enter your response as a whole number) The total cost per year of the outsourcing option is SEnter your response as a whole number.) Direct expenses Wages Benefits Maintenance, repair, and operating supplies Indirect expenses Supervisor salary Benefits Other office expenses $3,000 per worker per month 30% of wages per worker per month 1,500 per worker per month $4,000 per supervisor per month 50% of wages per supervisor per month $2,500 per supervisor per month

Explanation / Answer

The cost of Insourcing = Direct Expense for the year + Indirect Expense for the year

= (Wages + Benefits + Supplies Cost) * No. of Workers * 12 + (Supervisor Salary + Benfits + Office Expenses) * No. of Supervisor * 12

= (3000 + 0.30 * 3000 + 1500) * 4 * 12 + (4000 * 0.50 * 4000 * 2500) * 1 * 12 = $361200

The Total Cost of Outsourcing = $300000

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