Requirements 1 1. On the basis of financial considerations alone, should Milner introduce Easyspread 2.0 on July 1, 2017, or wait until October 1, 2017? Show your calculations, clearly identifying relevant and irrelevant revenues and costs. 2. What other factors might James Milner consider in making a decision? Data Table Easyspread 1.0 Easyspread 2.0 Selling price Variable cost per unit of diskettes, compact discs, user manuals Development cost per unit Marketing and administrative cost per unit Total cost per unit Operating income per unit 140 $ 24 60 30 114 190 40 100 40 180 10 26 $ Development cost per unit for each product equals the total costs of developing the software product divided by the anticipated unit sales over the life of the product. Marketing and administrative costs are fixed costs in 2017, incurred to support all marketing and administrative activities of Cayenne Software. Marketing and administrative costs are allocated to products on the basis of the budgeted revenues of each product. The preceding unit costs assume Easyspread 2.0 will be introduced on October 1, 2017 More Info The major problem is that Cayenne has overstocked the previous version of its spreadsheet package, Easyspread 1.0. Milner knows that once Easyspread 2.0 is introduced, Cayenne will not be able to sell any more units of Easyspread 1.0. Rather than just throwing away the inventory of Easyspread 1.0, Milner is wondering if it might be better to continue to sell Easyspread 1.0 for the next three months and introduce Easyspread 2.0 on October 1, 2017, when the inventory of Easyspread 1.0 will be sold out