Each year, Yellow Motors surveys 7,500 former and prospective customers regarding satisfaction and brand awareness. For the current year, the company is considering outsourcing the survey to Blue Associates, who have offered to conduct the survey and summarize results for $30,300. Craig Yellow, the president of Yellow Motors, believes that Blue 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 head of bookkeeping for Yellow has prepared the following summary of costs related to the survey in the prior year.
Mailing
$16,800
Printing (done by Solvy Print Shop)
4,500
Salary of Brian Raler, part-time employee who stuffed envelopes and summarized data when surveys were returned (100 hours X $15)
1,500
Share of depreciation of computer and software used to track survey responses and summarized results
1,100
Share of electricity/phone/etc. based on square feet of space occupied by Pat Fisher vs. entire company
500
Total
$23,600
Required:
What is the incremental cost of going outside versus conducting the survey as in the past?