Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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,

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
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 39,000 units $ 35.00 CD with Instructional Materiala 39,000 units $ 50.00 Estimated demand Estimated sales price Estimated cost per unit Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit manufacturing cost Additional development cont $ 6.75 9.00 9.00 9.50 $ 34.25 $ 9.25 13.00 12.25 9.50 $44.00 $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 CDs. 2. Should MSI add the instructional materials or sell the CDs without them? 3-a. Suppose that the higher price of the CDs with instructional materials is expected to reduce demand to 21,000 units. Complete the table given below based on Requirement 1 and 2 data. 3-6. Should MSI add the instructional materials or sell the CDs without them? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req Req 3B Based on the given data, compute the increase or decrease in profit that would result if instructional materials were added to the CDs. CD Only CD with Instructional Materials Incremental Sales Revenue Variable Costs Contribution Margin Additional Development Costs Differential Profit (LOSS) RE Reg 2 > Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req 3A Reg 38 Should MSI add the instructional materials or sell the CDs without them? Should MSI add the instructional materials or sell the CDs without them? Complete this question by entering your answers in the tabs below. Req1 Req2 Reg 3A Reg 3B Suppose that the higher price of the CDs with instructional materials is expected to reduce demand to 21,000 units. Complete the table given below based on Requirement 1 and 2 data. CD Only CD with Instructional Materials Incremental Sales Revenue Variable Costs Contribution Margin Additional Development Costs Differential Profit (Loss) Req2 Req 38 > Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req 3A Reg 38 Should Mst add the instructional materials or sell the CDs without them? Should MSI add the instructional materials or sell the CDs without them?

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

Step: 3

blur-text-image

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

Smart Sexy Auditing Clerk

Authors: Funny Career Quotes

1st Edition

B08RRJ97CP, 979-8588903189

More Books

Students also viewed these Accounting questions

Question

Evaluate for any numbers m, n 0. xm - 1 lim x1 x 1

Answered: 1 week ago