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 directly to teachers or school systems in the past, but its Marketing Department identified that possibility during a recent meeting.

MSI has been approached by a fourth-grade teacher from Portiand about the possibility of creating a specially designed game that would be customized for her classrcom 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 directly to teachers or school systems in the past, but its Marketing Department identified that passibility during a recent meeting. The teacher has offered to buy 1,900 copies of the CD at a price of $6.00 each. MSI could easily modify one of its existing educational programs about U.S. history to accommodate the request. The modifications would cost approximately S360. A summary of the information relaled to production of MSI's current history program follows: $1.12 0.17 Direct materials Direct labor Vanable manutacturing overhead Fixed m?nufacturing overhead 2 0 80 Total cost per unit Sales price per unil $13 00 Required: 1. Compute the incremental profit (or loss) from accepting the special order (or Loss) ncre?ses by 2. Should MSI accept the special order? O Yes O No 3. Suppose that the speclal order had been to purchase 1,900 coples of the program for $5.50 each. Compute the Incremental profit (or loss) from accepting the speclal order under this scenarc. by