The Rosa model of Mohave Corp. is currently manufactured as a very plain umbrella with no decoration. The company is considering changing this product to a much more decorative model by adding a silk screened design and embellishments. A summary of the expected costs and revenues for Mohave's two options follows: Rosa Umbrella Umbrella Estimated demand Estimated sales price Estimated manufacturing cost per unit 23,000 units 23,000 units S 25.00 S 35.00 S 15.50 3.50 2.50 5.00 26.50 S 17.50 6.00 4.50 5.00 33.00 $10,000 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit manufacturing cost Additional development cost Required: 1. Determine the increase or decrease in profit if Mohave sells the Rosa Umbrella with the additional decorations. Incremental $ 575,000$ 805,000 230,000 644,000(149,500) $ 80,500161,000$80,500 10,000) S 80,500S 151,000$ 70,500 Umbrella Umbrella Sales Revenue Varlable Costs Contribution Margin 494,500 0,000 Differential Profit (Loss) 2. Should Mohave add decorations to the Rosa umbrella? No Yes 3-a. Suppose that the higher price of the decorated umbrella is expected to reduce estimated demand for this product to 21,000 unis. Determine the increase or decrease in profit if Mohave sells the Rosa Umbrella with the additional decorations. Rosa Decor Umbrella Umbrella Incremental Sales Revenue Variable Costs Contribution Margin Additional Development Costs Differential Profit (Loss) 3-b. Should Mohave add decorations to the Rosa umbrella? No Yes