The Theater Arts Guild of Dallas (TAG-D) employs five people in its Publication
ID: 2472277 • Letter: T
Question
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 is as follows: Salaries $224,000 Benefits 36,000 Supplies 21,000 Office expenses 39,000 Office depreciation 28,000 Computer depreciation 24,000 Total $372,000 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. Required: A. Prepare a differential analysis dated February 22 to determine whether TAG-D should lay out pages internally (Alternative 1) or purchase layout services from the outside (Alternative 2). Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon (:) will automatically appear if required. B. On the basis of your analysis in part (a), should the page layout work be purchased from an outside company? C. What additional considerations might factor into the decision making?
Explanation / Answer
Answer:A
Answer:B Yes, the page layout work be purchased from an outside company because Purchase cost is less than manufacturing cost.
Answer:C saving in cost.
Particulars Alternative 1 Alternative 2 Differential Purchase cost 312000 -312000 Salaries 224000 224000 Benefits 36000 36000 Supplies 21000 21000 Office expenses 39000 39000 Office dep 28000 28000 Computer dep 24000 24000 Total cost 372000 312000 60000Related Questions
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