Granville Community College is considering outsourcing the
maintenance of its buildings and other facilities to an outside
firm for $300,000 per year. The 2020 budget is as follows:
Granville Maintenance Budget—2020
Direct expenses (per worker)
• Wages—$2,500 per worker per month
• Benefits—35% of wages per worker per month
• Maintenance, repair, and operating
supplies—$2,000 per worker per month
Indirect expenses
• Supervisor salary—$3,000 per month
• Benefits—40% of wages
• Other office expenses—$500 per month
a. (*) Calculate the total costs of insourcing versus outsourcing maintenance.
b. (**) What other reasons, other than costs, might Granville look at when deciding whether to outsource
maintenance activities?
