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15 Apr 2019
Viewmania is considering the addition of a fourth model to its line of Blu-ray players. This model would be sold to retailers for $375. The variable cost of this unit is $225. The demand for the new Model VM400 is estimated to be 300 units per year. Sixty percent of these unit sales of the new model is expected to come from other models already being manufactured by Viewmania (10 percent from Model VM100, 30 percent from Model VM200, and 60 percent from Model VM300). Viewmania will incur ongoing fixed costs of $30,000 to add the new model to the line. Based on the preceding data, should Viewmania add the new Model VM400 to its line of Blu-Ray players?
Viewmania is considering the addition of a fourth model to its line of Blu-ray players. This model would be sold to retailers for $375. The variable cost of this unit is $225. The demand for the new Model VM400 is estimated to be 300 units per year. Sixty percent of these unit sales of the new model is expected to come from other models already being manufactured by Viewmania (10 percent from Model VM100, 30 percent from Model VM200, and 60 percent from Model VM300). Viewmania will incur ongoing fixed costs of $30,000 to add the new model to the line. Based on the preceding data, should Viewmania add the new Model VM400 to its line of Blu-Ray players?
Elin HesselLv2
16 Apr 2019
