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MSIs educational products are currently 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 MSIs two options follows:

CD with Instructional CD Only 25,000 units Materials 25,000 units Estimated demand Estimated sales price Estimated cost per unit $ 21.00 $ 36.00 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead $ 1.75 3.00 3.00 2.50 $ 10.25 $ 2.25 6.00 6.25 2.50 $ 17.00 $105,000 Unit manufacturing cost Additional development cost 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 CD with Instructions Materials CD Only Incremental Sales Revenue Variable Costs Contribution Margin Additional Development Costs Differential Profit (Loss) 2. Should MSI add the instructional materials or sell the CDs without them? Add the Instructional Materials Sell the CDs without Instructional Materials 3-a. Suppose that the higher price of the CDs with instructional materials is expected to reduce demand to 20,000 units. Complete the table given below based on Requirement T and 2 dat CD with Instructions Material:s CD Only Incremental Sales Revenue Variable Costs Contribution Margin Additional Development Costs Differential Profit (Loss)

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