The Manufacturing Company VCI has line of three models of DVD recorders. They are also considering introduction of new model in addition. The problem of the case is to decide whether to add a new model to its line of products or not.

The following table shows the specifications of the existing models by the VCI manufacturers:
€¢ Contribution per unit = Selling price per unit - Variable cost per unit
The following shows the reduction in demand for proposed plan for each model.
€¢ 10% from Model LX1 = 18 units reduced
€¢ 30% from Model LX2 = 54 units reduce
€¢ 60% from Model LX3 = 108units reduced
€¢ LX4 estimated to be 300 units
The following table shows the specifications of the new proposal models by the VCI manufacturers:

What is the equation to find that 18 units have been reduced from model Lxl, 54 units LX2, 108 units Lx3

What is the equation to find that 18 units have been reduced from model Lx1, 54 units LX2, 108 units Lx3

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Model Model LX1 Model LX2 Model LX 3 Total Demand/ Year (Units) 2000 1000 500 DVD Selling Price per unit $175.00 $250.00 $300.00 $100.00 $125.00 $140.00 Variable cost per unit Contribution per unit $75.00 $125.00 $160.00 $150,000.00 $125,000.00 $80,000.00 $355,000.00 Total Contribution Model Model Model Model Model LX 4 Total LX1 LX2 LX 3 Demand/Year (Units) 1982 946 392 300 DVD Selling Price per unit S175 $250 $300 $375 Variable cost per unit $100 $125 $140 $225 Contribution per unit $75 $125 $160 $150 Total Contribution $148,650 $118,250 $62,720 $45,000 $374,620