ACCT 101 Decision to outsource ACCT 101 Decision to outsource | Page 2

Requirements
1. Would outsourcing the payroll function increase or decrease Duck Associates’ operating
income?
2. Tan believes that outsourcing payroll would simplify her job, but she does not like the prospect
of having to lay off Stock, who has become a close personal friend. She does not believe there is
another position available for Stock at his current salary. Can you think of other factors that might
support keeping Stock, rather than outsourcing payroll processing? How should each of the
factors affect Tan’s decision if she wants to do what is best for Duck Associates and act
ethically?