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EX25-8
The Theater Arts Guild of Dallas (TAG-D) employs five people in its Publication De- partment. 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 22400
Benefits 36000
Supplies 21000
Office Expenses 39000
Office Depreciation 28000
Computer Depreciation 24000
Total 372000
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.
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).
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?
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