What happens to the break even point when Sports Illustrated lays off all six staff photographers and uses freelancers instead? Original blog posting (March 13, 2015)

Sports Illustrated will be laying off all six of its staff photographers Will be using freelance photographers around the world instead Sports Illustrated is published 56 times a year and is read by over 23 million people each week One of 90 magazines owned by Time Inc.

Question 1 What type of cost would staff photographers be for Sports Illustrated (fixed, variable, or mixed)?

Question 2 What type of cost would the freelance photographers be for Sports Illustrated?

Question 3 What is likely to happen to the breakeven point for Sports Illustrated due to the switch to using freelance photographers?

Question 4 What are some disadvantages to Sports Illustrated’s decision to outsource its photography?

Question Recap What type of cost would staff photographers be for Sports Illustrated (fixed, variable, or mixed)? What type of cost would the freelance photographers be for Sports Illustrated? What is likely to happen to the breakeven point for Sports Illustrated due to the switch to using freelance photographers? What are some disadvantages to Sports Illustrated’s decision to outsource its photography?

For additional news stories to use in the accounting classroom, see the Accounting in the Headlines blog at http://accountingintheheadlines.com/ Related video resources can be found at http://www.youtube.com/user/accountingheadlines Questions or comments? Contact Dr. Wendy Tietz at wtietz@kent.edu