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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

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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 ayout work. The outside service is quoting a price of $13 per layout page. The budget for the Publication Department for the current year is as follows: Salaries $189,800 Benefits 42,900 Supplies 22,900 Office expenses 28,600 Office depreciation 25,700 Computer depreciation 17,200 Total $326,100 The department expects to lay out 22,000 pages for the current year. The Publication Department office space and equipment would be used for future administrative hords, or the department's function were purchased from the outside if a. Prepare a differential analysis dated February 22 to determine whether TAG-D should layout pages Internally (Alternative 1) or purchase Layout services from the outside (Alternative 2). If an amount is zero, entero. For those boxes in which you must enter fubtracted or negative numbers use a minus sign Differential Analysis Lay out Pages Internally (Alt. 1) or Purchase Layout Services (Alt. 2) February 22 Lay out Purchase Differential Pages Lay out Effect Internally Services on Income (Alternative 1) (Alternative 2) (Alternative 2) Sales price Costs Purchase price of lay out works Salaries 0 Differential Analysis Lay out Pages Internally (Alt. 1) or Purchase Layout Services (Alt. 2) February 22 Lay out Purchase Differential Pages Lay out Effect Internally Services on Income (Alternative 1) (Alternative 2) (Alternative 2) Sales price Costs: Purchase price of lay out work Salaries Benefits Supplies Office expenses Office depreciation Computer depreciation K Income (los) Petach Check My Wor a. For the make and buy alternatives provide the cost. Determine the differential effect on income of the revenues, costs and income (la) by subtracting tomative 1 from alter 2 b. The benefit from using an outside service is shown to be less than performing the layout work internally. The fixed costs (depreciation expenses) in th budget are irrelevant to the decision. Thus, the work should not be purchased from the outside on a strictly financial basis Check My Work Previous No

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