Laurel corporation owns it cafeteria with the following, Ask an Expert

Accounting

Laurel Corporation owns it cafeteria with the following annual costs:

Food $100,000

Food Preparation Labor 75,000

Overhead 110,000

The overhead is 40% fixed. Of the fixed overhead, $25,000 is the salary of the cafeteria manager. The remainder of the fixed overhead has been allocated from total company overhead. The company is considering outsourcing its cafeteria services. Assuming the cafeteria supervisor will remain with the company and that Laurel will continue pay his/her salary if outsourced, the maximum cost Laurel will be willing to pay an outside firm to provide cafeteria service is?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9949060

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