Question

enabling them to instantly evaluate both personal and commercial loan applications. To better focus on its client services, BKF.com is considering outsourcing some of its internal functions. Its controller, Jenny Lee, suggests starting with the company's Internal email system. She recently attended a conference and learned that GTE and NBC outsource their email function to companies such as Google and Yahoo. Lee began her analysis by identifying the total costs related to last month's in-house email operation, when there were 3,875 employee mailboxes: $23,250 6,975 Variable Costs Email license Virus protection license Miscellaneous Fixed Costs Computer hardware Total costs 15,112.5 35,262.5 $80,600 Lee analyzed the computer hardware costs, identifying its three components: 1. $15,868 were allocated costs that will continue even if the email system is abandoned. 2. $5,995 were non-personnel direct costs that will be avoided if the email system is abandoned. 3. $13,400 were the monthly salaries for two, equally paid interns who worked only on the email system. Mail.com, a leading provider of internet messaging outsourcing services, has offered to host BKF.com's email function for $13.90 per mailbox. BKF.com will still need to pay the virus protection license fee and one of the interns to maintain the virus protection software, A company has agreed to pay BKF.com $3,800 a month to use the computer storage space that will become available if BKF.com outsources its email function. Finally, Lee estimates that 4,180 mailboxes will be required per month next year. REQUIRED [6 tries] By how much will BKF.com's monthly profits change if they decide to outsource its email function to Mail.com instead of managing the service internally? [Note: if the buy costs are less than the make costs, enter the difference as a positive number; if the make costs are less than the buy costs, enter the difference as a negative number, using the minus sign instead of parentheses.]

Answer 1

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ANSE Amount in $ Alternative-ti make coat for 4 180 mailbox : Amount - Items tvarable costs ♡ Email license ($23250/3875 X 4180) : $ 25080 (") Vinus Protection Heense (69775/3570K 4150) · $ 7524 {"? Miscellaneous ($15,112.5/3875 X 4180) ė $ 16,302 » Fixed costs : (V) computer hardware : $ 35262-5 Maite cost ; $ 84,168.5 ke-1) Don a production fixed Unless cost never any veriance changes due to the changes in specified in question.

Amount ☆ Alternative-2 : Buy cast fore 4180 mailbox : Items to Variable costi (1) Buy cost of email function from mail.com (4180 x $13.90) ") Vincey Protection costo (6975/26-7X 4150) : $58,102 ; $ 7524 i $ 45,868 & Fixed costi computer hardware: li) Allocatech cost cun-avoldable) Non personner cost Cavoidables (1) Salary to intern for one (13400/2) : $ 6 700 $ 88,194 - $ 3,800 (vi) Oppertunity cost for storage space i $ 84,394 Buy cost for 4.180 mail.bon

$ 84394 : $ 84.168.5 (2) Buy cost for 4.00 mailbon (6 A make cost for Giso mailbox ence, BRE.com's monthly profit - $225.5/- will chare for an amount of -
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