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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 layout work. The outside service is quoting a price of $12 per layout page. The budget for the Publication Department for the current year is as follows: Salaries $198,000 45,000 Benefits Supplies 24,000 Office expenses 30,000 Office depreciation 27,000 Computer depreciation. 18,000 $342,000 The department expects to lay out 25,000 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. Total 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.

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 $12 per layout page. The budget for the Publication Department for the current year is as follows: Salaries $198,000 45,000 Benefits Supplies 24,000 Office expenses 30,000 Office depreciation 27,000 Computer depreciation. 18,000 $342,000 The department expects to lay out 25,000 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. Total 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.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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5.)
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 $12 per layout page. The budget for the Publication Department for the current year is as follows: Salaries Benefits Supplies Office expenses Office depreciation Computer depreciation $198,000 45,000 24,000 30,000 27,000 18,000 $342,000 Total The department expects to lay out 25,000 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.
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 $12 per layout page. The budget for the Publication Department for the current year is as follows: Salaries Benefits Supplies Office expenses Office depreciation Computer depreciation $198,000 45,000 24,000 30,000 27,000 18,000 $342,000 Total The department expects to lay out 25,000 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 Sales price Costs: Purchase price of lay out work $ Salaries Benefits Supplies Office expenses Office depreciation Computer depreciation Lay out Pages Internally Services (Alternative 1) (Alternative 2) (Alternative 2) Income (loss) Purchase Lay out Differential Effect on Income 000
Transcribed Image Text:Differential Analysis Lay out Pages Internally (Alt. 1) or Purchase Layout Services (Alt. 2) February 22 Sales price Costs: Purchase price of lay out work $ Salaries Benefits Supplies Office expenses Office depreciation Computer depreciation Lay out Pages Internally Services (Alternative 1) (Alternative 2) (Alternative 2) Income (loss) Purchase Lay out Differential Effect on Income 000
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