Each year, Miller Motors surveys 7,700 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 $34,412. Richard Miller, the president of Miller 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 current costs. The head of
bookkeeping for Miller has prepared the following summary of costs related to the survey in the prior year:
$17,800
5,400
Mailing
Printing (done by Lester Print Shop)
Salary of Pat Fisher, part-time employee
who stuffed envelopes and summarized
data when surveys were returned
(143 hours x $14)
Share of depreciation of computer and
software used to track survey responses
and summarize results
Share of electricity/phone/etc. based on
square feet of space occupied by Pat
Fisher vs. entire company
Total
2,002
1,280
650
$27,132
What is the incremental cost or savings of going outside vs. conducting the survey as in the past?