Refer to problems 30 and 31. Peterson’s Catering Company hired an engineering consulting firm to perform an engineering estimate of its business costs. The consulting firm came up with the following monthly cost estimates based on information for the current period:

Facilities costs............................................................ $9,500

Meal production-level costs....................................... $1.90 per meal produced

Delivery costs.......................................................... $11 per delivery

VIP services costs...................................................... $38 per service

New customer costs................................................... $1,250 per new customer

New product costs..................................................... $1,000 per new product

a. Assuming the following level of cost driver volume for a month, what is the estimated cost using the engineering estimates? (Don’t forget to include the facilities costs in your estimate.)

12,000............................................................Meals produced

1,100..............................................................Deliveries

300.................................................................VIP services

5.....................................................................New customers

2.....................................................................New products

b. Peterson’s Catering Company is considering outsourcing delivery. Compared to your answer in requirement a., how much would the company save by outsourcing the delivery service (before considering the cost of outsourcing)?