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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 layout pages for pamphlets, brochures, magazines, and other publications for the TAG- productions. The pages are delivered to an outside company for printing. The comparvis considering an outside publication service for the Layout 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 Benefits Supplies Office expenses Olice depreciation Computer depreciation Total $224,000 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 of the department's function were purchased from the outside 2. Prepare a dielni doted May 22 to determine whether TAG Oshould lay out pages internally (Alternative 1) or purchase layout services from the outside (Alternative. If an amount is zero, entro Differential Analysis Lay Out Pages Internally (Alt. 1) or Purchase Layout Services (Alt. 2) February 22 Lay Out Purchase Pages Layout Differential Internally Services Effects (Alternative 1) (Alternative 2) (Alternative 2) 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 Lay Out Purchase Pages Layout Internally Services (Alternative 1) (Alternative 2) Differential Effects (Alternative 2) Costs: Purchase price of layout work Salaries 0 -311.000 312,000 214.000 . 134000 3400 36.000 11.000 21.00 Benents Supplies Office expenses Office depreciation Computer depreciation -3.00 39,000 Total costs b. The benefit from using an outside service is shown to be the budget are to the decision. Thus, the work should than performing the layout work in all the fixed costs (depreciation expenses in purchased from the outside on strictly andalas C. Before clecting to the five employees, the TAG-D should consider the of the decision