quuetlvu U \\;.V Pun-n.4, mu Your company is planning on introducing a new residential smoke detector at the start of next year. The C052013 carbon monoxide and smoke alarm (to be called the LifeSaver ll) monitors and detects harmful smoke and carbon monoxide gas. it measures the concentration of CO or smoke and sounds a loud alarm pattern when a potentially harmful level is reached. The alarm is designed to detect both fast burning and slow smoldering fires. The type of alarm is visibly indicated by an alarm icon. The new model is a 120 volt hardwire combination smoke and carbon monoxide alarm, using the latest ionization, photoelectric and semiconductor technology. Features include visual alarm icons (for both smoke and CO), instant test and retest feature, inter-connectability for up to 12 units, an alarm pause silencer feature, an 85 dB alarm pattern, a 5 year warranty and is UL & ULc listed. The C052013 is clearly superior to your other lines but will actually carry a lower price due to the lower cost of the new technology. Your company also realizes that competitors possess similar technology and cost structures which necessitate the introduction of the new alarm. Your company will continue to sell its current product: the LifeSaver 1. Your boss has asked you to assess the impact of cannibalization on the company's projected total contribution margin. The LifeSaverl is priced at $49 and has unit variable costs of $29. The LifeSaver ll will be priced at $43 and will carry unit variable costs of $ 18. First year LifeSaver ll sales are projected at 375,000 units. The company had expected to sell 450,000 LifeSaver I alarms, without the introduction of LifeSaver ll. While difficult to estimate, the company believes that about 200,000 LifeSaver I's will be cannibalized by the introduction of the LifeSaver ll. Calculate the projected 2013 change in total contribution margin if the LifeSaver ii is introduced. Your Answer: l