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 quoting a price of $21 per layout page. The budget for the Publication Department for the current year is as follows:

The department expects to lay out 19,000 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 zero "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign.

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 $14 per layout page. The budget for the Publication Department for the current year is as follows:

The department expects to lay out 22,000 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 layout pages internally (Alternative 1) or purchase layout services from the outside (Alternative 2). If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign.

b. The benefit from using an outside service is shown to be   than performing the layout work internally. The fixed costs (depreciation expenses) in the budget are   to the decision. Thus, the work should   purchased from the outside on a strictly financial basis.

c. Before electing to   the five employees, the Guild should consider the   of the decision.

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 quoting a price of $12 per layout page. The budget for the Publication Department for the current year is as follows:

The department expects to lay out 22,000 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". For those boxes in which you must enter subtracted or negative numbers use a minus sign.

b. The benefit from using an outside service is shown to be than performing the lay out work internally. The fixed costs (depreciation expenses) in the budget are to the decision. Thus, the work should purchased from the outside on a strictly financial basis.

c. Before electing to the five employees, the guild should consider the of the decision.

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 quoting a price of $12 per layout page. The budget for the Publication Department for the current year is as follows:

The department expects to lay out 22,000 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". For those boxes in which you must enter subtracted or negative numbers use a minus sign.

b. The benefit from using an outside service is shown to be than performing the lay out work internally. The fixed costs (depreciation expenses) in the budget are to the decision. Thus, the work should purchased from the outside on a strictly financial basis.

c. Before electing to the five employees, the guild should consider the of the decision.

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 quoting a price of $21 per layout page. The budget for the Publication Department for the current year is as follows:

The department expects to lay out 19,000 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". For those boxes in which you must enter subtracted or negative numbers use a minus sign.

b. The benefit from using an outside service is shown to be   than performing the lay out work internally. The fixed costs (depreciation expenses) in the budget are   to the decision. Thus, the work should   purchased from the outside on a strictly financial basis.

c. Before electing to   the five employees, the guild should consider the   of the decision.

1. 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 $16 per layout page. The budget for the Publication Department for the current year is as follows:

   Salaries	$190,100
   Benefits	43,200
   Supplies	23,000
   Office expenses	28,800
   Office depreciation	25,900
   Computer depreciation	17,300
   Total	$328,300

   The department expects to lay out 18,000 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 The area of accounting concerned with the effect of alternative courses of action on revenues and costs.differential analysis dated February 22 to determine whether TAG-D should layout pages internally (Alternative 1) or purchase layout services from the outside (Alternative 2). If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign.

   Differential Analysis
   Lay out Pages Internally (Alt. 1) or Purchase Layout Services (Alt. 2)
   February 22
   	Lay out Pages Internally (Alternative 1)	Purchase Lay out Services (Alternative 2)	Differential Effect on Income (Alternative 2)
   Sales price	$	$	$
   Costs:
   Purchase price of lay out work	$	$	$
   Salaries
   Benefits
   Supplies
   Office expenses
   Office depreciation
   Computer depreciation
   Income (loss)	$	$	$

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   b. The benefit from using an outside service is shown to be

   • more
   • less
   than performing the layout work internally. The fixed costs (depreciation expenses) in the budget are
   • relevant
   • irrelevant
   to the decision. Thus, the work should
   • be
   • not be
   purchased from the outside on a strictly financial basis.

   c. Before electing to

   • keep
   • lay off
   the five employees, the Guild should consider the
   • short-run impact
   • long-run impact
   of the decision.

Brett and Lisa file taxes under the married filing jointly status. Lisa is a sales manager for an auto parts company and Brett takes care of their 3 children. In 2018, Lisa receives a promotion associated with a move to a new division located over 500 miles from their existing home. The cost to move their household items is $8,700. Lisa's employer reimburses her for $3,000 of those costs and also pays $2,100 for airfare for the entire family to fly to the new destination. Lisa's moving expenses deduction for 2018 is:

a.$5,700

b.$3,600

c.$0

d.$8,700

e.None of these choices are correct.

Ellen supports her family as a self-employed attorney. She reports $90,000 of income on her Schedule C and pays $8,000 for health insurance for her family, $2,500 for dental insurance, $4,000 for health insurance for her 23-year-old daughter who is no longer a dependent, and $3,000 for disability insurance for herself. What is Ellen's self-employed health insurance deduction?

a.$10,500

b.$12,000

c.$13,500

d.$14,500

e.$8,000

Over the years, Monica contributed $15,000 to a Roth IRA opened 10 years ago. The IRA has a current value of $37,500. She is 54 years old and takes a distribution of $25,000. How much of the distribution will be taxable to Monica?

a.$10,000

b.$0

c.$37,500

d.$15,000

e.$25,000

Jody is a physician (not covered by a retirement plan) with a salary of $40,000 from the hospital where she is employed. She supports her husband, Andre, who sells art work and has no earned income. Both are in their twenties. What is the maximum total amount that Jody and Andre may contribute to their IRAs and deduct for the 2018 tax year?

a.$5,000

b.$5,500

c.$11,000

d.$10,000

e.None of these choices are correct.

Waterbury Insurance Company wants to study the relationship between the amount of fire damage and the distance between the burning house and the nearest fire station. This information will be used in setting rates for insurance coverage. For a sample of 30 claims for the last year, the director of the actuarial department determined the distance from the fire station (x) and the amount of fire damage, in thousands of dollars (y). The MegaStat output is reported below.

1. a-1. Write out the regression equation. (Round your answers to 3 decimal places.)

2. How much damage would you estimate for a fire 7 miles from the nearest fire station? (Round your answer to the nearest dollar amount.)

1. c-1. Determine the coefficient of determination. (Round your answer to 3 decimal places.)

1. c-2. Fill in the blank below. (Round your answer to one decimal place.)

1. d-1. Determine the correlation coefficient. (Round your answer to 3 decimal places.)

1. d-3. How did you determine the sign of the correlation coefficient?

1. e-1. State the decision rule for 0.01 significance level: H₀ : ρ = 0; H₁ : ρ ≠ 0. (Negative value should be indicated by a minus sign. Round your answers to 3 decimal places.)

1. e-2. Compute the value of the test statistic for the hypothesis of β₁. (Round your answer to 2 decimal places.)

1. e-3. Is there any significant relationship between the distance from the fire station and the amount of damage? Use the 0.01 significance level.