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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,
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 fo teachers. A summary of the expected costs and revenues for MSI's two options follows: CD Only 40,000 units $ 34.00 CD with Instructional Materials 40,000 units $ 51.00 Estimated denand Estimated sales price Estimated cost per unit Direct materials Direct labor variable manufacturing overhead Fixed manufacturing overhead Unit manufacturing cost Additional development cost $ 2.00 9.se 9.5e 12.ee $ 31.ee $ 2.75 13.50 12.75 10.ee $39.00 $185, eee Required: 1. Based on the given data, compute the increase or decrease in profit that would result if Instructional materials were added to t 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 22,000 units. Comple table given below based on Requirement 1 and 2 data. 3-b. 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 3A Reg 3B Reg 2 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) Reg Req2 > 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 1 and 2 data. CD with CD Only Instructional Incremental Materials Sales Revenue Variable Costs Contribution Margin Additional Development Costs Differential Profit (Loss)
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