(Solved):MSI’s educational products are currently sold without any supplemental materials. The company is…

 

Question

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 CD with
Instructional Materials
Estimated demand 34,000 units 34,000 units
Estimated sales price $26.00 $45.00
Estimated cost per unit:
Direct

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