E$7-9($Algo$)$ Analyzing Sell$-$or$-$Process$-$Further Decision $[$LO $7-2,7-6]$

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:

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 $22,000$ units. Complete the table given below based on this scenario.

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

Complete this question by entering your answers in the tabs below.

Req $1$

Req $2$

Req $\backslash (3$ A $\backslash )$

Based on the given data, compute the increase or decrease in profit that would result if instructional materials were added to the CDs$.$ Complete this question by entering your answers in the tabs below.

Should MSI add the instructional materials or sell the CDs without them?

Should MSI add the instructional materials or sell the CDs without them? Complete this question by entering your answers in the tabs below.

Req $1$

Req $2$

Suppose that the higher price of the CDs with instructional materials is expected to reduce demand to $22,000$ units. Complete the table given below based on this scenario.

$\backslash$begin$\{$tabular$\}\{|$l$|$l$|$l$|$l$|\}$

$\backslash$hline & CD Only & $\backslash$begin$\{$tabular$\}\{$c$\}$

CD with Instructional $\backslash \backslash$

Materials

$\backslash$end$\{$tabular$\}$ & Incremental $\backslash \backslash$

$\backslash$hline Sales Revenue & & & $\backslash \backslash$

$\backslash$hline Variable Costs & & & $\backslash \backslash$

$\backslash$hline Contribution Margin & & & $\backslash \backslash$

$\backslash$hline Additional Development Costs & & & $\backslash \backslash$

$\backslash$hline Differential Profit $($Loss$)$ & & & $\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$ Complete this question by entering your answers in the tabs below.

Should MSI add the instructional materials or sell the CDs without them?

Should MSI add the instructional materials or sell the CDs without them?