lwaukee employs five people in its Publication Department. These people lay out pages for pamphlets, brochures, and other publications for the production. 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 $20.00 per layout page. The budget for the Publication Department is as follows:
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Make-or-Buy Decision
Wisconsin Arts of Milwaukee employs five people in its Publication Department. These people lay out pages for pamphlets, brochures, and other publications for the production. 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 $20.00 per layout page. The budget for the Publication Department is as follows:
| Salaries | $180,000 |
| Benefits | 52,000 |
| Supplies | 34,000 |
| Office expenses | 21,000 |
| Office |
60,300 |
| Computer depreciation | 40,200 |
| Total | $387,500 |
The department expects to lay out 33,500 pages. The computers used by the department have an estimated residual value of $26,800. The Publication Department office space would be used for future administrative needs if the department's function were purchased from the outside.
a. Prepare a differential analysis report for the make-or-buy decision, considering the differential revenues and costs.
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