Reference no: EM132502290

Each year, Crown Point Motors surveys 8,000 former and prospective customers regarding satisfaction and brand awareness. For the current year, the company is considering outsourcing the survey to RBG Associates, which has offered to conduct the survey and summarize results for $34,855. Craig Knight, the president of Crown Point Motors, believes that RBG will put out a higher-quality job than his company has been doing but is unwilling to spend more than $10,000 above current costs.

The head of bookkeeping for Crown Point has prepared the following summary of costs related to the survey in the prior year:

Mailing $17,300

Printing (done by Lester Print Shop) 6,100

Salary of Pat Fisher, part-time employee

who stuffed envelopes and summarized

data when surveys were returned

(120 hours x $19) 2,280

Share of depreciation of computer and

software used to track survey responses

and summarize results 1,090

Share of electricity/phone/etc. based on

square feet of space occupied by Pat

Fisher vs. entire company 660

Total $27,430

Question 1: What is the incremental cost or savings of going outside vs. conducting the survey as in the past?

Question 2: Will Craig Knight accept the RBG offer?