1. Herald Scripting Services (HSS) creates scripts for hearing-impaired people. The script is an electronic document of the audio converted to text by an individual called a scripter. Scripters can create scripts in most languages. One of the growing requests for scripting is for audio produced in a language called Esperanto. HSS has hired a full-time scripter who specializes in this task. The scripters annual salary is $49,000, and it is estimated that this individual has the potential of billing 1,400 hours per year. HSS charges out this scripters time at $75 per hour. On average, there is enough work to keep the scripter busy 80% of the time (billable hours). Total overhead attributable to this service is $15 per billable scripting hour. Fixed overhead for the company is $100,000 for the year, and total billable scripting hours for all scripters is 20,000 hours for the year. ESP Inc., a company that specializes in Esperanto, has approached the CEO of HSS with an offer to take over HSSs scripting of audio in Esperanto. It has offered to do this work on an hourly charge basis for a flat fee of $60 per hour. If HSS accepts the offer from ESP, it would no longer require the services of the in-house scripter and would no longer incur associated variable costs. Based on the current billable hours of the scripter, what would the annual savings (cost) per scripterbe if HSS accepts the offer?

a) ($18,200) b) ($16,800) c) ($7,000) d) $28,000