Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

plz help? E7-9 (Algo) Analyzing Sell-or-Process-Further Decision (LO 7-2, 7-6) MSI's educational products are currently sold without any supplemental materials. The company is considering the

plz help?
image text in transcribed
image text in transcribed
image text in transcribed
E7-9 (Algo) Analyzing Sell-or-Process-Further Decision (LO 7-2, 7-6) 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 $ 27.80 CD with Instructional Materials 35,000 units $46.00 Estimated demand Estimated sales price Estimated cost per unit Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit manufacturing cost Additional development cost $ 4.75 7.Ba 7.00 7.50 $ 26.25 $ 7.25 11.ee 10.25 7.58 $36.00 $105, een 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 22,000 units. Complete the table given below based on Requirement 1 and 2 data. 3-b. Should MSI add the instructional materials or sell the CDs without them? Req 1 Req 2 Req Reg 38 Based on the given data, compute the increase or decrease in profit that would result if instructional materials were ac the CDs. CD Only CD with Instructional Incremental Materials Sales Revenue Variable Costs Contribution Margin Additional Development Costs Differential Prolit (L03) FA Reg 2 > Complete this question by entering your answers in the tabs below. Req 1 Req 2 q Req 38 Suppose that the higher price of the CDs with instructional materials is expected to reduce demand to 22,000 units. 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)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Horngrens Financial and Managerial Accounting

Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura

5th edition

9780133851281, 013385129x, 9780134077321, 133866297, 133851281, 9780133851298, 134077326, 978-0133866292

Students also viewed these Accounting questions