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 company for printing. The company is considering an outside publication service for the layout work. The outside service is quoting a price of $17 per layout page. The budget for the Publication Department for the current year is as follo Salaries $269,300 Benefits 61,200 Supplies 32,600 Office expenses 40,800 Office depreciation 36,700 Computer depreciation 24,500 Total $465,100 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 layout pages internally (Alternative 1) or purchase layout services from the outside (Alternative 2). If an amount is zero, enter "0". For those boxe you must enter subtracted or negative numbers use a minus sign. Differential Analysis Lay out Pages Internally (Alt. 1) or Purchase Layout Services (Alt. 2) February 22 Differential Effect on Income (Alternative 1) (Alternative 2) (Alternative 2) Lay out Purchase Pages Internally Lay out Services Sales price Costs: Purchase price of lay out work s Salaries Benefits Supplies Office expenses
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 company for printing. The company is considering an outside publication service for the layout work. The outside service is quoting a price of $17 per layout page. The budget for the Publication Department for the current year is as follo Salaries $269,300 Benefits 61,200 Supplies 32,600 Office expenses 40,800 Office depreciation 36,700 Computer depreciation 24,500 Total $465,100 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 layout pages internally (Alternative 1) or purchase layout services from the outside (Alternative 2). If an amount is zero, enter "0". For those boxe you must enter subtracted or negative numbers use a minus sign. Differential Analysis Lay out Pages Internally (Alt. 1) or Purchase Layout Services (Alt. 2) February 22 Differential Effect on Income (Alternative 1) (Alternative 2) (Alternative 2) Lay out Purchase Pages Internally Lay out Services Sales price Costs: Purchase price of lay out work s Salaries Benefits Supplies Office expenses
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Transcribed Image Text: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 is quoting a price of $17 per layout page. The budget for the Publication Department for the current year is as follows:
Salaries
$269,300
Benefits
61,200
Supplies
32,600
Office expenses
40,800
Office depreciation
36,700
Computer depreciation
24,500
Total
$465,100
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 layout 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 Layout Services (Alt. 2)
February 22
Lay out
Purchase
Differential
Pages
Lay out
Effect
on Income
(Alternative 1) (Alternative 2) (Alternative 2)
Internally
Services
Sales price
Costs:
Purchase price of lay out work s
Salaries
Benefits
Supplies
Office expenses
Office depreciation
Computer depreciation
Income (loss)
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