Solution 1:
Computation of Profit - MSI Educational Products | |||
Particulars | CD Only | CD with instructions materials | Incremental |
Sales | $1,365,000.00 | $1,950,000.00 | $585,000.00 |
Variable costs | $965,250.00 | $1,345,500.00 | $380,250.00 |
Contribution margin | $399,750.00 | $604,500.00 | $204,750.00 |
Additional development costs | $0.00 | $105,000.00 | $105,000.00 |
Differential profit (Loss) | $399,750.00 | $499,500.00 | $99,750.00 |
Solution 2:
As net income is increasing, therefore MSI should add instruction manual with CDs.
Solution 3a:
Computation of Profit - MSI Educational Products | |||
Particulars | CD Only | CD with instructions materials | Incremental |
Sale volume | 39000 | 21000 | |
Sales | $1,365,000.00 | $1,050,000.00 | -$315,000.00 |
Variable costs | $965,250.00 | $724,500.00 | -$240,750.00 |
Contribution margin | $399,750.00 | $325,500.00 | -$74,250.00 |
Additional development costs | $0.00 | $105,000.00 | $105,000.00 |
Differential profit (Loss) | $399,750.00 | $220,500.00 | -$179,250.00 |
Solution 3b:
As net income is decreasing, therefore MSI should sell the CD without instruction manual.
Chapter 7 Assignment 0 Saved Required information The following information applies to the questions displayed below.)...
Required information E7-6 through E7-10. The following information applies to the questions displayed below.) Morning Sky, Inc. (MSI), manufactures and sells computer games. The company has several product lines based on the age range of the target market. MSI sells both individual games as well as packaged sets. All games are in CD format, and some utilize accessories such as steering wheels, electronic tablets, and hand controls. To date, MSI has developed and manufactured all the CDs itself as well...
Required information (The following information applies to the questions displayed below.) Morning Sky, Inc. ( MSI), manufactures and sells computer games. The company has several product lines based on the age range of the target market. MSI sells both individual games as well as packaged sets. All games are in CD format, and some utilize accessories such as steering wheels, electronic tablets, and hand controls. To date, MSI has developed and manufactured all the CDs itself as well as the...
Chapter 7 Assignment i Saved Required information [The following information applies to the questions displayed below.) Part 2 of 4 Morning Sky, Inc. (MSI), manufactures and sells computer games. The company has several product lines based on the age range of the target market. MSI sells both individual games as well as packaged sets. All games are in CD format, and some utilize accessories such as steering wheels, electronic tablets, and hand controls. To date, MSI has developed and manufactured...
manufactured all the CDs itselt as well as the accessories and packaging for all OT Its products The gaming market has traditionally been targeted at teenagers and young adults, however, the increasing affordability of computers and the incorporation of computer activities into Junior high and elementary school curriculums has led to a significant increase in sales to younger children. MSI has always included games for younger children but now wants to expand its business to capitalize on changes in the...
Required information "Morning Sky, Inc. (MSI), manufactures and sells computer games. The company has several product lines based on the age range of the target market. MSI sells both individual games as well as packaged sets. All games are in CD format, and some utilize accessories such as steering wheels, electronic tablets, and hand controls. To date, MSI has developed and manufactured all the CDs itself as well as the accessories and packaging for all of its products. The gaming...
Chapter 7 Assignment i Saved Required information (The following information applies to the questions displayed below.) Part 3 of 4 Morning Sky, Inc. ( MSI), manufactures and sells computer games. The company has several product lines based on the age range of the target market. MSI sells both individual games as well as packaged sets. All games are in CD format, and some utilize accessories such as steering wheels, electronic tablets, and hand controls. To date, MSI has developed and...
MSI's 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 MSI's two options follows: CD Only 31,000 units $ 27.00 CD with Instructional Materials 31,000 units $42.00 Estimated demand Estimated sales price Estimated cost per unit Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead...
E7-8 Analyzing Sell-or-Process-Further Decision [LO 7-2,7-6] MSI's 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 MSI's two options follows CD with Instructional Materials 40,000 units S 51.00 CD Only 40,000 units 34.00 Estimated demand Estimated sales price Estimated cost per unit Direct materials $ 2.75...
E7-8 Analyzing Sell-or-Process-Further Decision [LO 7-2, 7-6] MSI's educational products are currently sold without any supplemental materials. The company is considering the inclusion of instructional materials sych 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: CD with Instructional Materials 32,000 units $ 43.00 CD Only 32,000 units $ 28.00 Estimated demand Estimated sales price Estimated cost per unit Direct materials...
MSI's 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 MSI's two options follows: CD with Instructional Materials CD Only 42,000 units 26.00 42,000 units 53.00 Estimated demand Estimated sales price Estimated cost per unit Direct materials $ 2.00 $ 5.50 2.25 Direct labor 2.50 5.75...