One of the areas LG knows it needs to invest is it's internet capabilities. The client team has recently done a deep dive on this and found that to catch up with competitors Sony and Samsung, they'll have to invest about $350M into a team, partnerships and initial marketing to make an effective splash. They believe that this will allow them to increase unit price on new TVs by $200 per unit with continued variable costs of $150 per fully internet capable units. Assuming LG's investment predictions are accurate, how many TVs with the bumped up price point will they need to sell to breakeven on their investment? (Answer: 7M units)
When we calculate contribution margin..is it price per unit - variable cost per unit? Here we don't know the original price, only the increment in price, so I am wondering how they could use the contribution margin formula
