All information is given. Rosa model of Mohave Corp. is currently manufactured as a very plain umbrella with no decoration. The company is considering changing this product to a much more decorative model by adding a silk$-$screened design and embellishments. A summary of the expected costs and revenues for Mohave's two options follows:

$\backslash$table$[[,\backslash$table$[[$Rosa$],[$Umbrella$]],\backslash$table$[[$Decorated$],[$Umbrella$]],],[$Estimated demand,$27,000,$units $,27,000,$units$],[$Estimated sales price,$$29\mathrm{.}00,$$$39\mathrm{.}00,],[$Estimated manufacturing cost per unit,,,$],[$Direct materials,$$19\mathrm{.}50,$$$21\mathrm{.}50,],[$Direct labor,$4\mathrm{.}50,7\mathrm{.}00,],[$Variable manufacturing overhead,$3\mathrm{.}50,5\mathrm{.}50,],[$Fixed manufacturing overhead,$6\mathrm{.}00,6\mathrm{.}00,],[$Unit manufacturing cost,$$33\mathrm{.}50,$$$40\mathrm{.}00,],[$Additional development cost,,$$12,000,]]$

Required:

Determine the increase or decrease in profit if Mohave sells the Rosa Umbrella with the additional decorations.

Should Mohave add decorations to the Rosa umbrella?

$3-$a$.$ Suppose that the higher price of the decorated umbrella is expected to reduce estimated demand for this product to $25,000$ units. Determine the increase or decrease in profit if Mohave sells the Rosa Umbrella with the additional decorations.

$3-$b$.$ Should Mohave add decorations to the Rosa umbrella?

Determine the increase or decrease in profit if Mohave sells the Rosa Umbrella with the additional decorations.

$\backslash$table$[[,\backslash$table$[[$Rosa$],[$Umbrella$]],\backslash$table$[[$Decorated$],[$Umbrella$]],$Incremental$],[$Sales Revenue,,,$],[$Variable Costs,,,$],[$Contribution Margin,,,$],[$Additional Development Costs,,,$],[$Differential Profit $($Loss$),,,]]$

Suppose that the higher price of the decorated umbrella is expected to reduce estimated demand for this product to $25,000$ units. Determine the increase or decrease in profit if Mohave sells the Rosa Umbrella with the additional decorations.

$\backslash$table$[[,\backslash$table$[[$Rosa$],[$Umbrella$]],\backslash$table$[[$Decorated$],[$Umbrella$]],$Incremental$],[$Sales Revenue,,,$],[$Jariable Costs,,,$],[$Pdditional Development Costs,,,$],[$Differential Profit $($Loss$),,,]]$