Required information E7.6 through E7.9. [The following information applies to the questions cisplayed bedow] Morning Sky, incorporated (MSh manulactures and sels computer games. The company has severai product lines based on the age range of the target market. MSi sells both individual games as well as packaged sets. Al 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 pockaging for all of its products. The gaming market has traditionally been targeted at teenagers and young aduits; however, the increasing atfordabity of compuiers and the incorporation of computer activities into junior high and elementary school curriculums has led to a signifleant increase in sales to younger children. MSi has always ineluded games for younger children but now wants to expand its business to capitalize on changes in the industry. The company currently has excess capacity and is investigating several possible ways to improve profiabilify. E7-7 (Algo) Analyzing Make-or-Buy Decision [LO 7-2, 7-4] MSt is considering outsourting the production of the handheid control modvle used with some of its products. The company has received a bid from Monte Legend Compary (MLC) to produce 13,000 units of the module per year for $26.00 each. The followng information pertains to MSr's production of the control modules: MSt has determined it could eliminate all variable costs if the control modules were produced externally, but none of the fired overhead is avoidable. At this time, MSt has no spocific use in mind for the space that is currently dedicated to the control module production. Required: 1. Compute the difference in cost between making and buying the control module. 2. Should MSI buy the modules from MLC or continue to make them? 3-a. Suppose the MSI space currenty used for the modules could be utired by a new product line that wodet generate 537,000 in annual profit. Recompute the difference in cost between making and buying under this scenario. 3-b. Does this change your recommendation to MSI? Complete this question by entering your answers in the tabs below. Compute the difference in cost between making and buying the control module