MSI's educational 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 costs and revenues for MSI's two options follows CD with CD Only Estimated demand Estimated sales price Estimated cost per unit 36,000 units 30.00 36.000 units $ 47.00 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead 5.25 7.50 7.50 8.00 $ 7.75 11.50 10.75 8.00 S 38.00 $105,000 Unit manufacturing cost Additional development cost Required: 1. Based on the given data, Compute the increase or decrease in profit that would result if instructional materials were added to the CDs CD with Instructions Materials CD Only Incremental $1,080,000 Sales Revenue Variable Costs Contribution Margin Additional Development Costs Differential Profit (Loss) 1,692,000 612,000 351.000 612.00 $ 201,000 105,000 507,000 $156,000 729.000 1,080,000 s 351,000 S 1,050,000) S 351,000 $ 2. Should MSI add the instructional materials or sell the CDs without them? Add the Instructional Materials Sell the CDs without Instructional Materials 3-a. Suppose that the higher price of the CDs with instructional materials is expected to reduce demand to 18,000 units. Complete the table given below based on Requirement 1 and 2 cata CD with Instructions Materials CD Only Incremental Sales Revenue Variable Costs Contribution Margin Additional Development Costs Differential Profit (Loss) $ 1,080,000 $ (729,000) s 351,000 s 846.000 (540,00 $ (234.000) (1890 306.000 (10,500) 20.100 (4,500) (10,500) (150,000) $ 3,500 $ 3-b. Should MSI add the instructional materials or sell the CDs without them? Add the Instructional Materials Sell the CDs without Instructional Materials