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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 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. 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). If an amount is zero, enter "0". Differential Analysis Lay Out Pages Internally (Alt. 1) or Purchase Layout Services (Alt. 2) February 22 Lay Out Purchase Pages Layout Internally Services Differential Effects (Alternative 1) (Alternative 2) (Alternative 2) Costs: Purchase price of layout work Salaries Benefits Supplies Office expenses Office depreciation Computer depreciation 0 8. Total costs

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