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 $17 per layout page. The budget for the Publication Department for the current year is as follows: Salaries $246,800 Benefits 56,100 Supplies 29,900 Office expenses 37,400 Office depreciation 33,700 Computer depreciation 22,400 Total $426,300 The department expects to lay out 22,000 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. a. Prepare a differential analysis dated February 22 to determine whether TAG-D should layout pages internally (Alternative 1) or purchase layout services from the outside (Alternative 2). If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Lay out Pages Internally (Alt. 1) or Purchase Layout Services (Alt. 2) February 22 Lay outPagesInternally(Alternative 1) PurchaseLay outServices(Alternative 2) DifferentialEffecton Income(Alternative 2) Sales price $ $ $ Costs: Purchase price of lay out work $ $ $ Salaries Benefits Supplies Office expenses Office depreciation Computer depreciation Income (loss) $ $ $ b. The benefit from using an outside service is shown to be than performing the layout work internally. The fixed costs (depreciation expenses) in the budget are to the decision. Thus, the work should purchased from the outside on a strictly financial basis. c. Before electing to the five employees, the Guild should consider the of the decision.
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.
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 $17 per layout page. The budget for the Publication Department for the current year is as follows:
| Salaries | $246,800 |
| Benefits | 56,100 |
| Supplies | 29,900 |
| Office expenses | 37,400 |
| Office |
33,700 |
| Computer depreciation | 22,400 |
| Total | $426,300 |
The department expects to lay out 22,000 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.
a. Prepare a differential analysis dated February 22 to determine whether TAG-D should layout pages internally (Alternative 1) or purchase layout services from the outside (Alternative 2). If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign.
| Differential Analysis | |||
| Lay out Pages Internally (Alt. 1) or Purchase Layout Services (Alt. 2) | |||
| February 22 | |||
| Lay out Pages Internally (Alternative 1) |
Purchase Lay out Services (Alternative 2) |
Differential Effect on Income (Alternative 2) |
|
| Sales price | $ | $ | $ |
| Costs: | |||
| Purchase price of lay out work | $ | $ | $ |
| Salaries | |||
| Benefits | |||
| Supplies | |||
| Office expenses | |||
| Office depreciation | |||
| Computer depreciation | |||
| Income (loss) | $ | $ | $ |
b. The benefit from using an outside service is shown to be than performing the layout work internally. The fixed costs (depreciation expenses) in the budget are to the decision. Thus, the work should purchased from the outside on a strictly financial basis.
c. Before electing to the five employees, the Guild should consider the of the decision.
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