Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. msis educational products currently are sold witho

MSIs educational products currently are sold without any supplemental materials. The company is considering the...

70.2K

Verified Solution

Question

Accounting

MSIs 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 MSIs two options follows:
CD Only CD with Instructional Materials
Estimated demand 27,000 units 27,000 units
Estimated sales price $ 23.00 $ 38.00
Estimated cost per unit
Direct materials $ 2.75 $ 3.25
Direct labor 4.007.00
Variable manufacturing overhead 4.007.25
Fixed manufacturing overhead 3.503.50
Unit manufacturing cost $ 14.25 $ 21.00
Additional development cost $ 105,000
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 20,000 units. Complete the table given below based on this scenario.
3-b. Should MSI add the instructional materials or sell the CDs without them?

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Statistics
1.2K views

ple re 0 Google US Facebook YouTu M Sign 41 7

Biology
1.2K views

which of the following statements about genetic drift and population size is true A) if a population...

Economics
1.2K views

Give a feedback A company that operates internationally is Apple inc. Apple Inc is an American multinational...

Operations Management
1.2K views

(a) Explain why property rights are best understood as a \"Bundle of Sticks.\" (b) Provide and...

General Management
1.2K views

Could you please write the business Industry Profile and Outlook for our new company which coaches...

Biology
1.2K views

What are the thin curvy organisms shown below Euglena Plasmodium Physarum CO

Biology
1.2K views

0 00 0 30 C A B Speed 1x The people who left the cult...

Algebra
1.2K views

Consider the following product to sum formulas sin x sin x costx1 x2 cos x1...

Accounting
1.2K views

begining of the curtent yebc, the compiny had made the following...

Accounting
1.2K views

Auditing accounting Hagar, CPA is the in charge auditor with administrative responsibilities...

Accounting
1.2K views

Carol wants to invest money in a 6% CD account that compounds semiannually. Carol would...

Accounting
1.2K views

Predetermined activity rates - 3 minutes Better Bags manufactures two types of reusable bags: canvas...