Exercise 7-5 Incremental Analysis (16 points) Problem data follows: 7,600 35,000 $ Annual number of customers surveyed Cost of survey if conducted by RBG Associates Costs related to the survey in the prior year. Mailing Printing (done by Lester Print Shop) Salary of Pat Fisher, part-time employee who stuffed envelopes and summarized data when surveys were returned Depreciation of computer and software Electricity and phone costs Total $17,500 6,000 2,080 1,200 600 $27,380 Number of hours spent on survey by Pat Fisher 130 Required: fill in the yellow cells and also the name of the costs listed under the cost savings. The "Cost of RGB" has been filled in for you. What is the incremental cost of going outside versus conducting the survey as in the past? Cost of RGB Less cost savings: Incremental cost of outsourcing Craig Knight, the president of Knight Motors, believes that RBG will do a higher-quality job than his company has been doing. However, he is unwilling to spend more than $10,000 above current costs. Will Craig Knight accept the RBG offer? Explain in detail why or why not given his cost ceiling