MSI's educational products currently are 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: 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 CD Only 42,000 units $26.00 $ 2.00 2.50 2.50 2.50 $9.50 CD with Instructional Materials. 42,000 units $ 53.00 $ 2.25 5.50 5.75 2.50 $ 16.00 $ 125,000 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 this scenario. 3-b. Should MSI add the instructional materials or sell the CDs without them?

MSI's educational products currently are 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: 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 CD Only 42,000 units $26.00 $ 2.00 2.50 2.50 2.50 $9.50 CD with Instructional Materials. 42,000 units $ 53.00 $ 2.25 5.50 5.75 2.50 $ 16.00 $ 125,000 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 this scenario. 3-b. Should MSI add the instructional materials or sell the CDs without them?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Clicking Generate at the bottom of the A/P Create Payment Batch form creates a payment batch. Group of answer choices. True False
Answer the following questions by writing down the correct letter next to the relevant number:
please help with the question that is attached as a picture. thanks
All blanks need to be filled please and thank you, it's incomplete as of now.
create a journal entry in the proper format
How to make t account and journal entry. Please use only these numbers when answering the questions please
Repost the complete question and add sub-parts to be sol
Please provide the introductory part and answer for question D.
True or false? In a manual system, it is proper to splits journal entry at the bottom page.