and Morning Sky, Inc. (MSQ, manufactures and sells computer games. The company has several product lines based on the age range of the target market, MSI sells both individual games as well as packaged sets A games are in CD some utilizo accessories such as steering wheels, electronic tablets, and hand controts To date, MS has developed and manufactured all the CDs itself as well as the accessories and packaging for all of its producs The gaming market has traditionally been targeted at teenagers and young adults however, the increasing affordability of computers and the incorporation of computer activities into junior high and elementary school curriculums has led to e significant increase in sales to younger children. MSI has always included games for younger children but now warts expand its business to capitalize on changes in the industry. The company currently has excess capacity and is investigating several possible ways to improve profitability MSI is considering outsourcing the production of the handheld control module used with some of its products. The company has received a bid from Monte Legend Co. (MLC) to produce 19,000 units of the module per year for $1700 each. The fuliowing information pertains to MSI's production of the control modules Save & Ext Check my work Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost per unit $10 $23 MSI has determined that it could eliminate all variable costs if the control modules were produced externally, but none of the fed overhead is avoidable. At this time, MSI has no specific use in mind for the space that is currently dedicated to the control module production. Required: 1. Compute the difference in cost between making and buying the control module 2. Should MSI buy the modules from MLC or continue to make them? 3-a. Suppose that the MSI space currently used for the modules could be utilized by a new product line that would generate $39.000 in annual profit. Recompute the difference in cost between making and buying under this scenario 3-b. Does this change your recommendation to MSI? Austrane