Torrey Pines Is Studying Whether to Outsource Its Human Resources

question 21

Multiple Choice

Torrey Pines is studying whether to outsource its Human Resources (H/R) activities. Salaried professionals who earn $390,000 would be terminated; in contrast, administrative assistants who earn $120,000 would be transferred elsewhere in the organization. Miscellaneous departmental overhead (e.g., supplies, copy charges, overnight delivery) is expected to decrease by $30,000, and $25,000 of corporate overhead, previously allocated to Human Resources, would be picked up by other departments. If Torrey Pines can secure needed H/R services locally for $410,000, how much would the company benefit by outsourcing?

• A) $10,000.
• B) $35,000.
• C) $130,000.
• D) $155,000.
• E) Nothing, as it would be cheaper to keep the department open.

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Definitions:

Company Contributions

Financial or in-kind support provided by a business to societal, environmental, or community projects.

Intrafunctional Scope

The breadth and depth of activities within a single function or department of an organization, focusing on internal efficiency and effectiveness.

Intercompany Scope

Pertains to activities, transactions, or operations that occur between different entities within the same corporate group or parent company.

Interfunctional Scope

Refers to the range of different functions or departments within a company that collaborate and engage with each other to achieve common objectives.