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MSI's educational products currently are sold without any supplemental materials. The company is considering the...

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Accounting

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:
\table[[,,\table[[CD with],[Instructional],[Materials]]],[Estimated demand,CD Only,32,000 units],[Estimated sales price,$2,000 units,3.00],[Estimated cost per unit,,],[Direct materials,$5.25,5.75],[Direct labor,6.50,9.50],[Variable manufacturing overhead,6.50,9.75],[Fixed manufacturing overhead,6.00,6.00],[Unit manufacturing cost,$24.25,$31.00
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