Solution a:
Differential Analysis | |||
Lay out Pages Internally (Alt. 1) or Purchase Lay out Services (Alt. 2) | |||
22-Feb | |||
Particulars | Lay out Pages Internally (Alternative 1) | Purchase Lay out Services (Alternative 2) | Differential Effect on Income (Alternative 2) |
Selling Price | $0.00 | $0.00 | $0.00 |
Costs: | |||
Purchase price of lay out work | $0.00 | $484,000.00 | $484,000.00 |
Salaries | $319,400.00 | $0.00 | -$319,400.00 |
Benefits | $72,600.00 | $0.00 | -$72,600.00 |
Supplies | $38,700.00 | $0.00 | -$38,700.00 |
Office expenses | $48,400.00 | $0.00 | -$48,400.00 |
Office depreciation | $43,600.00 | $43,600.00 | $0.00 |
Computer depreciation | $29,000.00 | $29,000.00 | $0.00 |
Income (loss) | -$551,700.00 | -$556,600.00 | -$4,900.00 |
Solution b:
The benefits from using an outside service is shown to be lower than performing the layout work internally. The fixed costs (Depreciation expense) in the budget are irrelevant to the decision. Thus the work should not purchased from outside on a strictly financial basis.
Solution c:
Before electing to terminate five employees, the guild should consider the long term future impact of the decision.
Make-or-Buy Decision for a Service Company The Theater Arts Guild of Dallas (TAG-D) employs five people...
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 quoting a price of $13 per layout page. The budget for the Publication Department for the current year is...
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 $13 per layout page. The budget for the Publication Department for the current year...
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 $18 per layout page. The budget for the Publication Department for the current year...
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 $18 per layout page. The budget for the Publication Department for the current year...
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 $19 per layout page. The budget for the Publication Department for the current year...
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 quoting a price of $17 per layout page. The budget for the Publication Department for the current year is...
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 quoting a price of $18 per layout page. The budget for the Publication Department for the current year is...
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 $19 per layout page. The budget for the Publication Department for the current year...
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 quoting a price of $15 per layout page. The budget for the Publication Department for the current year is...
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 $19 per layout page. The budget for the Publication Department for the current year is as follows: Salaries $238,300 Benefits...