Question
MSI has been approached by a fourth-grade teacher from Portland about the possibaty of creating a specialty designed game that would be customized for
MSI has been approached by a fourth-grade teacher from Portland about the possibaty of creating a specialty 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 MS has not sold its products directly to teachers or school systems in the past, but its Marketing Department identified that possibilty during a recent meeting The teacher has offered to buy 1,400 copies of the CD at a price of $6.00 each. MSI could easily modify one of its existing educational programs about US history to accommodate the request. The modifications would cost approximately $320 A summary of the information related to production of MST's current history program follows Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost per unit Sales price per unit $123 040 2.10 1.90 $563 $13.00 Required: 1. Compute the incremental profit (or loss) from accepting the special order Profit (or Loss) Increases by
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