Chapter 10 - Homework eBook Calculator Print Item Make-or-Buy Decision for a Service Company The Theater Arts Guild of Dallas (TAG-D) employs five people in its Publication Department. These people lay out pages for pamphlets, brochures, magazines, and other publications for the TAG-D productions. The pages are delivered to an outside company for printing. The company is considering an outside publication service for the layout work. The outside service quoting a price of $18 per layout page. The budget for the Publication Department for the current year is as follows: Salaries $308,900 Benefits 70,200 Supplies 37,400 46,800 Office expenses 42,100 Office depreciation Computer depreciation 28,100 Total $533,500 The department expects to lay out 26,000 pages for the current year. The Publication Department office space and equipment would be used for future administrative needs, if the department's function were purchased from the outside. a. Prepare a differential analysis dated February 22 to determine whether TAG-D should lay out pages internally (Alternative 1) or purchase layout services from the outside (Alternative 2). If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Lay out Pages Internally (Alt. 1) or Purchase Lay out Services (Alt. 2) February 22 Lay out Pages Internally (Alternative 1) Purchase Lay out Services (Alternative 2) Differential Effect on Income (Alternative 2) Selling Price $0 Costs: Durchase nrice of lav out works $0 Check My Work 5 more Check My Work uses remaining. Next > Assignment Score: 3.33% Save and Exit Submit Assignment for Grading Chapter 10 - Homework eBook Calculator Print Item a. Prepare a differential analysis dated February 22 to determine whether TAG-D should lay out pages internally (Alternative 1) or purchase layout services from the outside (Alternative 2). If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Lay out Pages Internally (Alt. 1) or Purchase Lay out Services (Alt. 2) February 22 Lay out Pages Internally (Alternative 1) Purchase Lay out Services (Alternative 2) Differential Effect on Income (Alternative 2) Selling Price Costs: Purchase price of lay out work $ $0 $0 50 Salaries Benefits Supplies Office expenses Office depreciation Computer depreciation Income (loss) b. The benefit from using an outside service is shown to be to the decision. Thus, the work should than performing the lay out work internally. The fixed costs (depreciation expenses) in the budget are purchased from the outside on a strictly financial basis. c. Before electing to the five employees, the guild should consider the of the decision. Check My Work 5 more Check My Work uses remaining. Next > Assignment Score: 3.33% Save and Exit Submit Assignment for Grading
