The Theater Arts Guild of Dallas (TAG-D) employs 5 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 $18 per layout page. The budget for the Publication Department for the current year is as follows: Salaries $261,400 Benefits 59,400 Supplies 31,700 Office expenses 39,600 Office depreciation 35,600 Computer depreciation 23,800 Total $451,500 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 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 (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 Layout Services (Alt. 2) February 22 Lay out Pages Internally Purchase Differential Effects (Alternative 2) Lay out Services (Alternative 1) (Alternative 2) Unit costs: Purchase price of lay out work Salaries Benefits Supplies Office expenses Office depreciation Computer depreciation Total unit costs b. The benefit from using an outside service is shown to be than performing the layout work internally. The fixed costs (depreciation expenses) in the budget are *to the decision. Thus, the work should purchased from the outside on a strictly financial basis. c. Before electing to - the five employees, the Guild should consider the of the decision.
The Theater Arts Guild of Dallas (TAG-D) employs 5 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 $18 per layout page. The budget for the Publication Department for the current year is as follows: Salaries $261,400 Benefits 59,400 Supplies 31,700 Office expenses 39,600 Office depreciation 35,600 Computer depreciation 23,800 Total $451,500 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 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 (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 Layout Services (Alt. 2) February 22 Lay out Pages Internally Purchase Differential Effects (Alternative 2) Lay out Services (Alternative 1) (Alternative 2) Unit costs: Purchase price of lay out work Salaries Benefits Supplies Office expenses Office depreciation Computer depreciation Total unit costs b. The benefit from using an outside service is shown to be than performing the layout work internally. The fixed costs (depreciation expenses) in the budget are *to the decision. Thus, the work should purchased from the outside on a strictly financial basis. c. Before electing to - the five employees, the Guild should consider the of the decision.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The Theater Arts Guild of Dallas (TAG-D) employs 5 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 $18 per layout page. The budget for the Publication Department for the current year is as follows:
Salaries
$261,400
Benefits
59,400
Supplies
31,700
Office expenses
39,600
Office depreciation
35,600
Computer depreciation
23,800
Total
$451,500
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 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 (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
Internally
Lay out
Services
Effects
(Alternative 2)
(Alternative 1) (Alternative 2)
Unit costs:
Purchase price of lay out work $
Salaries
Benefits
Supplies
Office expenses
Office depreciation
Computer depreciation
Total unit costs
b. The benefit from using an outside service is shown to be
than performing the layout work internally. The fixed costs (depreciation expenses) in the budget are
- to the decision. Thus, the work should
purchased from the outside on a strictly financial basis.
c. Before electing to
- the five employees, the Guild should consider the
- of the decision.
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