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Analyze the one-year financial impact of outsourcing

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Reference no: EM132905766

Question - Sandra's Super School Inc. is situated on the waterfront in Montreal and has won awards for her amazing grounds. She has 3 full time gardeners who have worked for her for 10 years. She is considering outsourcing the maintenance of these grounds and has received a bid from Joe's Gardening for $300,000 per year. Joe promises to maintain the grounds in a comparable manner. Sandra's costs for the maintenance in the previous year was a total of $300,000, including:

Salary of gardeners $195,000

Plant materials 80,000

Fertilizer 10,000

Fuel 12,000

Depreciation of equipment 12,000

Total $309,000

Required -

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

b. Discuss the qualitative factors that should be considered in the decision.

Reference no: EM132905766

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