Pronghorns Carpentry is considering outsourcing its accounts receivable function. Currently, Pronghorn employs two full-time clerks and one part-time clerk to manage accounts receivable. Each full-time clerk has an annual salary of $37,000 plus fringe benefits costing an additional 27% of the salary. The part-time clerk makes $20,000 per year and has no fringe benefits. Total salary plus fringe cost is $113,980. Pronghorn estimates that each account receivable incurs a $10 variable cost. The Small Business Accounts Receivables Group (SBARG) specializes in handling accounts receivable for small- to medium-size companies. Doris Roberts from SBARG has offered to do the accounts receivable for Pronghorns Carpentry at a fixed cost of $81,940 per year plus $32 per account receivable. Next year, Pronghorn expects to have 1,800 accounts receivable.

Calculate the cost for Pronghorns Carpentry to continue doing accounts receivable in-house.

Total cost

$_______

Calculate the cost for Pronghorns Carpentry to use SBARG to handle the accounts receivable. SBARG cost= $_____________

If the fixed annual cost offered by SBARG is nonnegotiable but it is willing to negotiate the variable cost, what variable cost from SBARG would make Pronghorn indifferent to the two options? (Round answer to the 2 decimal places, e.g. 15.25.) Variable cost $_______