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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

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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 Only 35.000 units $ 27.00 Estimated demand Estimated sale price Estimated cost per unit Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit manufacturing cost Additional development cost $ 4.75 7.00 7.00 7:50 $26.25 CD with Instructional Materials 35,000 units $ 46,00 $ 7.25 11.00 10.25 7.50 $36.00 $105,000 Required: 1. Based on the given data. Compute the increase or decrease in profit that would result if instructional materials were added to the con Go Onty CD with instructions Materials Incremental Sales Revenue Variable Costa Contribution Margin Additional Development Costs Differential Protos) . 2. Should MSI add the instructional materials or sell the CDs without them? Add the instructional and Sell the CDs without insectional Materials 30 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 22.000 units Complete the table given below based on Requirement and data CD Only CD with Instruction Materials Incremental Sales Revenue Variable costs Contribution Margin Additional Development Costs Differential Profit (055) 3-5. Should stadd the instructional materials or sell the CDs without them? Add the instructional Materials Sell the CDs without instructional Materials MA ov 30

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