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The following information applies to the questions displayed below) Morning Sky, Inc. (MS, manufactures and sells computer games. The company has several product lines based on the age range of the target market. MSI sells both individual games as well as packaged sets. All games are in CD format, and some utilize accessories such as steering wheels, electronic tablets, and hand controls. To date, MSI has developed and manufactured all the CDs itself as well as the accessories and packaging for all of its products The gaming market has traditionally been targeted at teenagers and young adults, however, the increasing affordability of computers and the incorporation of computer activities into junior high and elementary school curriculums has led to a significant increase in sales to younger children MSi has always included games for younger children but now wants to expand its business to capitalize on changes in the industry. The company currently has excess capacity and I Investigating several possible ways to improve profitability MSIis considering outsourcing the production of the handheld control module uced with some of its products. The company has received a bid from Monte Legend Co (MLC) to produce 25,000 units of the module per year for $22.00 each. The following information pertains to MSi's production of the control modules 123 Oirect materials Direct labor Variable manufacture overhead ed manufacturing overhead Toes cost of it 29 MSI has determined that it could eliminate all variable costs of the control modules were produced externally, but none of the feed overhead is avoidable. At this time, MSi has no specific use in mine for the space that is currently dedicated to the control module production How ou Variable costs If the control modules were produced externally, but none of the feed overhead is avoidable. 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 MSI buy the modules from MLC or continue to make them? 3-6. Suppose that the MSI space currently used for the modules could be ucized by a new product line that would generate $41,000 In annual profit. Recompute the difference in cost between making and buying under this scenario 3-b. Does this change your recommendation to MSI? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req3A Reg 38 Suppose that the MSI space currently used for the modules could be utilized by a new product line that would generate $41,000 in annual profit. Recompute the difference in cost between making and buying under this scenario. Difference in Cent 1 MSI has determined that it could eliminate all variable costs of the control modules were produced externally, but none of the fixed overhead is avoidable. 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 MSI buy the modules from MLC or continue to make them? 3-a. Suppose that the MSI space currently used for the modules could be utilized by a new product line that would generate $41000 in annual profit. Recompute the difference in cost between making and buying under this scenario. 3-b. Does this change your recommendation to MSI? Complete this question by entering your answers in the tabs below. Req! Reg 2 Raq 3A Reg 38 Does this change your recommendation to MSI? Does this change your recommendation to MSI7 PURCU SUPpose that $2,000 of the common fixed costs could be avoided if the POP product line were eliminated 3.b. Should MSI drop the POP product? Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Reg 3 Req 38 Should MSI drop the POP product? Should Msi drop the POP product? be avoided in the POP product line were eittillater 3-b. Should MSI drop the POP product? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req 3A Reg 30 Calculate the incremental effect on profit if the POP product is eliminated. Suppose that $2,000 of the common fixed costs could be avoided if the POP product line were eliminated. Eeston Profit 1. Calculate the incremental effect on profit if the POP product is eliminated. 2. Should MSI drop the POP product? 3-a. Calculate the incremental effect on profit if the POP product is eliminated. Suppose that $2,000 of the common fixed costs could be avoided if the POP product line were eliminated. 3-b. Should MSI drop the POP product? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3A Req 38 Should MSI drop the POP product? Should MS drop the POP product?