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                     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.                                            For most construction projects, Bradley Heating and Cooling buys sheet metal and forms the metal into heating/cooling ducts as needed. The company estimates the costs of making and installing ductwork for Kerry Park shopping mall to be as follows:                                                                                         Materials        $     35,000                           Labor to form ductwork             4,000                           Labor to install ductwork           10,000                           Misc. variable costs               1,500                           Fixed costs allocated based on labor hours           3,000                           Total costs        $     53,500                                                           The fixed costs relate to the company's building equipment,and office staff. Expected billings and other costs pertaining to Kerry Park are:                                     Projected billing of Kerry Park for services  $     68,000                                                           Bradley is currently behind schedule on other projects which incurs costs as follows. The penalty is a variable cost.                 Late penalty        $       6,000                                                           Walt Bradley, the owner of Bradley Heating and Cooling, is considering ordering prefabricated ductwork for the Kerry Park job, which includes the cost of sheet metal. The following cost is expected:                                      Prefabricated ductwork cost     $     42,000                                                           If Walt buys the prefabricated ductwork, he'll be able to reassign labor ductwork workers to another project and avoid  late fees.                                   If Walt buys the pre-fabricated ductwork, workers will still install the ductwork and incurr miscellaneous variable costs for the Kerry Park Job.          Required                                 Complete the schedule to determine if Bradley  should make the ductwork or buy it prefabricated? Enter a 0 for any cells in G or H without a number.                                                         Buy Prefabricated  Make the product Difference (G-H)                                                                                                                                                                                                                                                   Explain if Bradley should make the ductwork or buy it prefabricated. Does buying the fabriated ductwork save costs or increase costs?