VCI is considering the addition of a fourth model to its line of DVDs. This model would be sold to retailers for $535. The variable cost of this unit is $315. The demand for the new Model LX4 is estimated to be 1650 units per year, Sixty percent of these units sales of the new model is expected to come from other models already being manufactured by VCI (10 percent from Model LX1, 30 percent from Model LX2 and 60 percent from Model LX3. Vci will incur a fixed cost of 20,000 to add new model to the line. Based on the data do you think they should add a new Model LX4 to the lines or vcr's and if so why?

Model DVR selling price per unit. Variable cost per unit Demand year units

Model Lx 1 635. 215. 1535.

model LX 2. 315. 110 2865

model LX 3. 415. 105. 3535