Reference no: EM13141027
The Theater Arts Guild of Chicago (TAG-C) employs five people in its Publication Department. These people lay out pages for pamphlets, brochures, and other publications for the TAG-C 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 $15 per layout page.
The budget for the Publication Department for 2010 is as follows:
Salaries $220,000
Benefits 35,000
Supplies 30,000
Office expenses 25,000
Office depreciation 30,000 FC
Computer depreciation 22,000 FC
Total $362,000
The department expects to lay ouf 20,000 pages for 2010. The computers used by the department have an estimated residule value of $7,000. The publication Department office space would be used for furniture administrative needs, if the department's function were purchased from the outside.
a) Prepare a differential analysis report, dated December 15, 2009, for the make-or-buy decision, considering the 2010 differential revenues and costs.
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