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 tay 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 $19 per layout page. The budget for the Publication Department for the current year is as follows: Salaries $326,000 Benefits 74,100 39,500 Supplies Office expenses 49,400 Office depreciation 44,500 Computer depreciation 29,600 Total $563,100 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 "o". 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 Purchase Lay out Services Differential Effect on Income 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 Purchase Lay out Services Differential Effect on Income (Alternative 1) (Alternative 2) (Alternative 2) Selling Price Costs: Purchase price of lay out work SO so $0 Salaries Benefits Supplies qo1000 Office expenses Office depreciation Computer depreciation Income (loss) b. The benefit from using an outside service is shown to be costs (depreciation expenses) in the budget are purchased from the outside an than performing the lay out work internally. The fixed to the decision. Thus, the work should