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 $22 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 Total 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. $319,400 72,600 38,700 48,400 43,600 29,000 $551,700 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 Unit costs: Purchase price of lay out work Salaries Benefits Supplies Office expenses Office depreciation Computer depreciation Total unit costs Lay out Pages Internally Services (Alternative 1) (Alternative 2) 0 V 319,400 X 72,600 X Purchase Lay out 0 ✓ ✓ 0 0 ✓ 0 ✓ 0 X 0 X 22 X Differential Effects (Alternative 2) REASO
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 $22 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 Total 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. $319,400 72,600 38,700 48,400 43,600 29,000 $551,700 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 Unit costs: Purchase price of lay out work Salaries Benefits Supplies Office expenses Office depreciation Computer depreciation Total unit costs Lay out Pages Internally Services (Alternative 1) (Alternative 2) 0 V 319,400 X 72,600 X Purchase Lay out 0 ✓ ✓ 0 0 ✓ 0 ✓ 0 X 0 X 22 X Differential Effects (Alternative 2) REASO
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:#becausesneakers...
HW CH 25
Supplies
Office expenses
Office depreciation
Computer depreciation.
Total
Make-or-Buy Decision for a Service Company
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 $22 per layout page. The budget for the Publication Department for the current year is as follows:
Salaries
Benefits
eBook
$319,400
72,600
Unit costs:
Purchase price of lay out work $
Salaries
Benefits
Supplies
Office expenses
Office depreciation
Computer depreciation
Total unit costs
Custom Order
38,700
48,400
43,600
29,000
$551,700
>
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.
Feedback
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
Pages
Internally
Services
(Alternative 1) (Alternative 2)
0 ✓
319,400 X
72,600 X
Purchase
Lay out
0 ✓
✓
0
0
Print Item
0
0 X
0 X
22 X
Differential
Effects
(Alternative 2)
D
Check My Work
a. For the make and buy alternatives provide the costs. Determine the differential effect on income of the revenues, costs, and income (loss) by subtracting alternative 1 from alternative 2.
00
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