Maddox,a Division of Stanley Enterprises,currently Performs Computer Services for Various

Maddox,a division of Stanley 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 $80,000 and $25,000,respectively,in addition to $18,000 of corporate administrative overhead allocated from Stanley.If Maddox were to use the outside consultant,fixed operating costs would be reduced by 70%.The irrelevant costs in Maddox's outsourcing decision total:

A) $17,500.
B) $18,000.
C) $25,000.
D) $25,500.
E) some other amount.

Correct Answer:

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