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Each year, Knight Motors surveys former and prospective customers regarding satisfaction and brand awareness. For the current year, the company is considering outsourcing the survey

Each year, Knight Motors surveys former and prospective customers regarding satisfaction and brand awareness. For the current year, the company is considering outsourcing the survey to RBG Associates, who have offered to conduct the survey and summarize results. Craig Knight, the president of Knight Motors, believes that RBG will do a higher-quality job than his company has been doing, but is unwilling to spend more than $10,000 above the current costs. The following amounts for number of customers surveyed and the cost of the survey follow:
Annual number of customers surveyed 7,600
Cost of survey if conducted by RBG Associates $ 35,000
The head of bookkeeping for Knight has prepared the following summary of costs related to the survey in the prior year.
Mailing $17,500
Printing (done by Lester Print Shop) 6,000
Salary of Pat Fisher, part-time employee who stuffed envelopes
and summarized data when surveys were returned 2,080
Share of depreciation of computer and software used to track
survey responses and summarized results 1,200
Rent
Share of electricity/phone/etc. based on square feet of space
occupied by Pat Fisher vs. entire company 600
Total $27,380
Number of hours spent on survey by Pat Fisher 130
Required
What is the incremental cost of going outside versus conducting the survey as in the past?
Less cost savings:
Incremental cost of RGB providing the survey
Will Craig Knight accept the RBG offer?

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