(Answered) Question - oakland college is considering outsourcing

Accounting

Question - Oakland College is considering outsourcing grounds maintenance. In this regard, Oakland has received a bid from Highline Grounds Maintenance for $308,700 per year. Highline states that its bid will cover all services and planting materials required to "keep Oakland's grounds in a condition comparable to prior years." Oakland's cost for grounds maintenance in the preceding year were $317,690 as follows:

Salary of three full-time gardeners		$204,030
Plant materials		81,460
Fertilizer		8,880
Fuel		8,740
Depreciation of tractor, mowers, and other
	miscellaneous equipment	14,580
Total		$317,690

If Oakland College outsources maintenance, it will be able to sell equipment for $34,300, and the three gardeners will be laid off.

Analyze the one-year financial impact of outsourcing grounds maintenance.

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