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MSI has been approached by a fourth-grade teacher from Portland about the possibility of creating a specially designed game that would be customized for her

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MSI has been approached by a fourth-grade teacher from Portland about the possibility of creating a specially designed game that would be customized for her classroom and environment The teacher would like an educational game to correspond to her classroom coverage of the history of the Pacific Northwest, and the state of Oregon in particular. MSI has not sold its products direc teachers or school systems in the past, but its Marketing Department identified that possibility during a recent meeting The teacher has offered to buy 1,600 copies of the CD at a price of $6.00 each. MSI could easily modity one of its existing educational programs about U.S history to accommodate the request modifications would cost approximately $360. A summary of the information related to production of MSI's current history program follows Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead S 1.05 0.31 2 16 1 80 $ 532 13.00 Total cost per unit Sales price per unit Required 1. Compute the incremental proft (or loss) from accepting the special order 5 3,968 ofit (or Loss) Increases by 2. Should MSI accept the special order? Yes No Compute the incremental prott (or loss) from accepting the special order under this scenanc had heen to ourchase 1.600 copies of the program for $5 50 each

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