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In-house operation is preferable to outsourcing it to Duffy’s Maid Service.
Susan’s Annual Clean-up cost = 365*50*$12.50 = $228125
Fixed Cost for space, equipment and supplies = $60000
Total Cost if Susan does not outsource = $(228125 + 60000) = $288125
Duffy’s Maid Service Annual Quoted Cost = 365*50*$18.50 = $337625
Fixed Cost for sundry items such as uniforms = $24000
Total cost if Susan outsource = $(337625 + 24000) = $361625
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