Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed

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 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 $380. 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 1.06 0.34 2.21 1.90 $ 5.51 Total cost per unit Sales price per unit Required 1. Compute the incremental profit (or loss) from accepting the special order fit (or Loss) t (or Loss) Increases by creases 2. Should MSI accept the special order? Yes No 3. Suppose that the special order had been to purchase 1,900 copies of the program for $5.50 each. Compute the incremental pront (or loss) from accepting the special order under this scenario. Profit (or L ncreases 4. Suppose that MSI is operating at full capacity. To accept the special order, it would have to reduce production of the history program. Compute the special order price at which MSI would be indifferent between accepting or rejectirg the special order. (Round your answer to 2 decimal places.) Special Order Price

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance And Accounting For Business

Authors: Bob Ryan

1st Edition

9781861529930

More Books

Students also viewed these Accounting questions

Question

Find A -1 , if it exists. A 10 04 4 02 0 -5 0 20 0 1

Answered: 1 week ago

Question

What committees does the person serve on?

Answered: 1 week ago