This paper presents a detailed example regarding whether to continue to generate service internally or to acquire the service externally. The example demonstrates that most of the basic data required for the correct decision on closing one service department can be obtained from the information normally presumed to be available when service department costs are allocated to producing departments by the algebraic (simultaneous equation) method. The example includes variable and nonvariable service department costs. Finally, the decision to close more than one service department is examined.