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 $13 per layout page. The budget for the Publication Department for the current year is as follows: Salaries $224,000 Benefits 36,000 Supplies 21,000 Office expenses 39,000 Office depreciation 28,000 Computer depreciation 24,000 Total $372,000 The department expects to lay out 24,000 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. Question Content Area 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". Differential AnalysisLay Out Pages Internally (Alt. 1) or Purchase Layout Services (Alt. 2)February 22 Lay Out Pages Internally (Alternative 1) Purchase Layout Services (Alternative 2) Differential Effects (Alternative 2) Costs: Purchase price of layout work $fill in the blank da23deffbfd5028_1 $fill in the blank da23deffbfd5028_2 $fill in the blank da23deffbfd5028_3 Salaries fill in the blank da23deffbfd5028_4 fill in the blank da23deffbfd5028_5 fill in the blank da23deffbfd5028_6 Benefits fill in the blank da23deffbfd5028_7 fill in the blank da23deffbfd5028_8 fill in the blank da23deffbfd5028_9 Supplies fill in the blank da23deffbfd5028_10 fill in the blank da23deffbfd5028_11 fill in the blank da23deffbfd5028_12 Office expenses fill in the blank da23deffbfd5028_13 fill in the blank da23deffbfd5028_14 fill in the blank da23deffbfd5028_15 Office depreciation fill in the blank da23deffbfd5028_16 fill in the blank da23deffbfd5028_17 Computer depreciation fill in the blank da23deffbfd5028_18 fill in the blank da23deffbfd5028_19 Total costs $fill in the blank da23deffbfd5028_20 $fill in the blank da23deffbfd5028_21 $fill in the blank da23deffbfd5028_22
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.
Question Content Area
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 $13 per layout page. The budget for the Publication Department for the current year is as follows:
| Salaries | $224,000 |
| Benefits | 36,000 |
| Supplies | 21,000 |
| Office expenses | 39,000 |
| Office |
28,000 |
| Computer depreciation | 24,000 |
| Total | $372,000 |
The department expects to lay out 24,000 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.
Question Content Area
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".
| Lay Out Pages Internally (Alternative 1) |
Purchase Layout Services (Alternative 2) |
Differential Effects (Alternative 2) |
|
| Costs: | |||
| Purchase price of layout work | $fill in the blank da23deffbfd5028_1 | $fill in the blank da23deffbfd5028_2 | $fill in the blank da23deffbfd5028_3 |
| Salaries | fill in the blank da23deffbfd5028_4 | fill in the blank da23deffbfd5028_5 | fill in the blank da23deffbfd5028_6 |
| Benefits | fill in the blank da23deffbfd5028_7 | fill in the blank da23deffbfd5028_8 | fill in the blank da23deffbfd5028_9 |
| Supplies | fill in the blank da23deffbfd5028_10 | fill in the blank da23deffbfd5028_11 | fill in the blank da23deffbfd5028_12 |
| Office expenses | fill in the blank da23deffbfd5028_13 | fill in the blank da23deffbfd5028_14 | fill in the blank da23deffbfd5028_15 |
| Office depreciation | fill in the blank da23deffbfd5028_16 | fill in the blank da23deffbfd5028_17 | |
| Computer depreciation | fill in the blank da23deffbfd5028_18 | fill in the blank da23deffbfd5028_19 | |
| Total costs | $fill in the blank da23deffbfd5028_20 | $fill in the blank da23deffbfd5028_21 | $fill in the blank da23deffbfd5028_22 |
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