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MSIS aducational products are currently sold without any supplemental materials. The company is considering the inclusion of instructional materials such as an overhead slide presentation,
MSIS aducational products are currently sold without any supplemental materials. The company is considering the inclusion of instructional materials such as an overhead slide presentation, potential test questions, and classroom bulletin board materials for teachers. A summary of the expected casts and revenues for MSI'S TWD options follows: CD Only 44,000 units $ 28.00 Materials 44,000 units 55.00 $ Estimated demand Estimated sales price Estimated cost perunt Directia Variable manufacturing $ 3.00 3.50 6.501 6.75 Fixed manufacturing overhead Unli marulathuring cost Additional development cost 3.50 3.80 $13.50 $ 20.00 $125.000 Required: 1. Based on the given date, Compute the increase or decrease in profit that would result instruccional materials were added to the CDs. CD with CD Only Instructions incremental Materials Sales Revenue Variabia Costs Contribution Margin Additional Development Costs Differential Proht (LOS) 2. Should MSI add the instructional materials or sell the CDs without then? Add the Instrucional Materials Sell the CDs without instructional Materials 3-A. Suppose that the higher price of the CDs with structional material is expected to reduce demand to 21000 units Complete the table given belowb a n Requirement and 2 che CD Only CD with Instructions Salas Hevenue Variable Costs Contribution Margin Additional Development Costs Differential Proht (L08) 3-b. Should MSi acid the instructional materials or sell the CDs without them? Add the Instructional Materials Sell the CDs without instructional Materials
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