company for printing. The company is considering an outside publication service for the layout work. The outside service is quoting a price of s13 per layout page. The budget for the Publication Department for the current year is as follows: Salaries Benefits $224,000 $ 36,000 21,00D Supplies Office expenses 39,000 Office depreciation Computer depreciation Total 28,000 24,000 $372,000 The department expects to lay out 24,000 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 "O". Differential Analysis Lay Out Pages Internally (Alt. 1) or Purchase Layout Services (Alt. 2) February 22 Differential Lay Out Purchase Pages Layout Internally Services (Alternative 1) (Alternative 2) Casts: Purchase price of layout work $ Salaries Effects (Alternative 2) Benefits Supplies office expenses Office depreciation Computer depreciation Total costs b. The benefit from using an outside service is shown to be purchased from the outside on a strictly financial basis. then performing the layout work internally. The fixed costs (depreciation expenses) in the budget are to the decision. Thus, the work should c. Before electing to the five employees, the TAG-D should consider the of the decision 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- 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 is quating a price of $13 per layout page. The budget for the Publication Department for the current year is as follows: Salaries $224,000 Benefits Supplies Office expenses Office depreciation Computer depreciation Total 36,000 21,000 39,000 28,000 24,000 $372.000 The department expects to lay out 24,000 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 layaut services from the outside (Alterative 2). If an amount is zero, entero'. Differential Analysis Lay Out Pages Internally (Alt. 1) or Purchase Layout Services (Alt. 2) February 22 Lay Out Purchase Pages Layout Internally Services (Alternative 1) (Alternative 2) Differential Effects (Alternative 2) Costs Purchase price of layout work Salaries Benefits Supplies Office expenses Office depreciation Computer depreciation Tatal casts than performing the layout work Internally. The fixed costs (depreciation expenses) in the budget are to the decision. Thus, the work should b. The benefit from using an outside service is shown to be purchased from the outside on a strictly financial basis
