CD ONLY Cd with instructional materials Estimated demand 27,000 units 27,000 units Estimated Sales Price $23.00...

	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	4.00	7.00
Variable Manufacturing Overhead	4.00	7.25
Fixed moh	3.50	3.50
UNIT Manufacturing cost	14.25	21.00

Additonal devolopment cost 105,000

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 Requirement 1 and 2 data.

3-b. Should MSI add the instructional materials or sell the CDs without them?

Solutions

Expert Solution

ekkarill92 answered 1 year ago

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