E12-17 - 1) Quality of the work should not be compromised...

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Differential analysis Report dated December 15, 2009 Assumption: Office expenses of $25,000 will not be incurred if purchased from outside. As the office space will be used for future administrative needs, depreciation on office will continue to be incurred. Salaries Benefits Supplies Office expenses Office depreciation Computer depreciation Outside service cost for layout Residual value of computers Total net costs Yes. The page layout work should be purchased from outside company because it saves $39,000. Additional factors to be considered in decision making:
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Unformatted text preview: 1) Quality of the work should not be compromised on cost. Hence the quality provided by the outside company must be checked. 2) Outsourcing the layout work will require laying-off the existing 5 employees. The company should first check if these employees could be absorbed in any other department. Theatre Arts Guild of Chicago (TAG-C) To Make To Buy $220,000 $0 $35,000 $0 $30,000 $0 $25,000 $0 $30,000 $30,000 $22,000 $0 $0 $300,000 $0 ($7,000) $362,000 $323,000 Savings $220,000 $35,000 $30,000 $25,000 $0 $22,000 ($300,000) $7,000 $39,000...
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This note was uploaded on 04/11/2011 for the course ACC 305 taught by Professor Allison during the Spring '11 term at Western Intl..

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E12-17 - 1) Quality of the work should not be compromised...

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