(Solved): Video Concepts, Inc. (VCI) manufactures a line of DVD recorders (DVDs) that are distributed to lar ...

Video Concepts, Inc. (VCI) manufactures a line of DVD recorders (DVDs) that are distributed to large retailers. The line consists of three models of DVDs. The following data are available regarding the models: VCI is considering the addition of a fourth model to its line of DVDs. This model would be sold to retailers for \( \$ 375 \). The variable cost of this unit is \( \$ 225 \). The demand for the new Model LX: 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 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 the new model to the line. Based on the preceding data, should VCI add the new Model LX4 to its line of VCRs? Why?