Problem data follows:

Annual number of customers surveyed $7,600$

Cost of survey if conducted by RBG Associates $$35,000$

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 $2,080$

Depreciation of computer and software $1,200$

Electricity and phone costs $600$

Total $$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 $$35,000$

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.