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CoursHeroTranscribedText: Great Eastern Credit Union (GECU) has two operating departments (Branches and Electronic) and three service departments (Processing, Administration, and Maintenance). During July, the following costs and service department usage ratios were recorded. Supplying Using Department Department Processing Administration Maintenance Branches Electronic Processing 50% 10% 40% Administration 60% 40% Maintenance 10% 20% 20% 50% Direct cost $88, 000 $550, 090 $274, 090 $4, 250, 090 $2, 450, 000 The cost accountant at Great Eastern Credit Union estimates that the cost structures in its departments are as follows. Processing Administration Maintenance Branches Electronic Variable costs $60, 090 $154, 000 $132, 060 $1, 550, 090 $1, 100, 060 Fixed costs 28, 090 396, 000 142, 000 2,700, 090 1, 350, 090 Total costs $88 , 090 $550, 000 $274, 050 $4, 250, 090 $2, 450, 090 Avoidable fixed costs $14, 090 $283, 000 $ 80,000 $ 700, 090 $ 610, 060 Required: a. If GECU outsources the Processing Department, what is the maximum it can pay an outside vendor without increasing total costs? b. If GECU outsources the Administration Department, what is the maximum it can pay an outside vendor without increasing total costs? c. If GECU outsources the Maintenance Department, what is the maximum it can pay an outside vendor without increasing total costs? Maximum Amount a. Processing Department b. Administration Department C. Maintenance Department

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