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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 class materials for teachers. A summary of the expected costs and revenues for MSI's two options follows: CD with Instructional CD Only 40,000 units Materials 40,000 units Estimated demand Estimated sales price Estimated cost per unt $ 34.00 51.00 s 2.00 2.75 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead 9.50 9.50 10.00 13.50 12.75 Unit manufacturing cost Additional development cost 10.00 31.00 39.00 $105,000 Required: data, Compute the increase or decrease in profit that would result f instructional materials were added to the CDs. CD with Instructions Incremental CD Only Materials s 1,360,000 Sales Revenue Variable Costs Contribution Margin Additional Development Costs Differential Profit (Loss) 2,040,000

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