Boise, a division of Price Enterprises, currently performs computer services for various departments of the...
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Boise, a division of Price 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 $89,000 and $34,000, respectively, in addition to $27,000 of corporate administrative overhead allocated from Price. If Boise were to use the outside consultant, fixed operating costs would be reduced by 60%. The irrelevant costs in Boise's outsourcing decision total: (8 04:44:17 Multiple Choice Print O $20,400. O $27,000. O $34,000. O $40,600 O None of the answers is correct. San Ruiz Interiors provides design services to residential and commercial clients. The residential services produce a contribution margin of $460,000 and have traceable fixed operating costs of $490,000. Management is studying whether to drop the residential operation. If closed, the fixed operating costs will fall by $370,000 and San Ruiz' income will: (8 04:42:59 Multiple Choice Print increase by $30,000. increase by $90,000. increase by $340,000. Oo oo decrease by $90,000. decrease by $340,000
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