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Required information [The following information applites to the questions ditsplayed below] Morning Siky, Incorporated MSI, manufactures and sels compuser games. The company has several product

image text in transcribed Required information [The following information applites to the questions ditsplayed below] Morning Siky, Incorporated MSI, manufactures and sels compuser games. The company has several product ines bazed on the age range of the target market. MSI sells both individual games as well as puckaged sets. All games are in CD format, and some uoltre accessontes wuch as stesering wheck, electronic tablets, and hand controls. To date, MSI has developed and manufactured all the CDe itself as well as the accescorles and packaging for all of its producte. The gaming market has tradivonally been targeted at teensgers and young aduhs; however, the increasing allordability of computers and the incorporation of computer actempes irto junior high and elementary school cumculums has led to a slgnificant increase in sales to youngar children. MSI has always included games for younger children but now wants to expand its buahess to capitalize on changes in the industry. The compary currertly has excess capactly and is invertigsting several passible ways to improve profitabiliny. MSI k concidering outsourcing the production of the handheld control module used wth some of ts products. The compuny has recetved a bid from Morte Legend Compary (MLO vo produce n, 000 unts of the module per year for $1700 each. The followng information pertant to MSrs production of the cortrol modules: MSI has determined it could eliminate all vartable costs if the control modules were produced externally, but none of the foxed overhead k avoldable. At this time, MSi has no specific use in mind for the space that is currently dedicated to the control module production. Required: 1. Compute the difference in cost between making and buying the control module. 2 Should MS bUy the modules from MiC or contunue to make them? 3-a. Suppoce the MSI space currently used for the modules could be utilized by a new product ine that would generate \$A1,000 in annual profr. Recompute the difference in cost between making and buyng under this scenario. 3b. Does this change your recommendaton to MSr? Complete this question by entering your answers in the tabs below. Compse the dfference in cost between making and buying the control modul. Should MSI buy the modules from MLC or continue to make them? Should MSI buy the modules from MLC cr cantinue to make them? Suppose the MSI space currently used for the modules could be utilized by a newt product line that would generate $41,000 in annual profit. Recompute the difference in cost between making and buying under this scenario. Dillerence in cost Does this change your recommendation to MSI? Does this charge your recomintendation to MSI

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