Bubbly Waters currently sells 320 Class A spas, 470 Class C spas, and 220 deluxe model spas each year. The firm is considering adding a mid-class spa and expects that if it does, it can sell 395 units per year. However, if the new spa is added, Class A sales are expected to decline to 235 units while the Class C sales are expected to increase to 495. The sales of the deluxe model will not be affected. Class A spas sell for an average of $12,300 each. Class C spas are priced at $6,200 and the deluxe models sell for $17,200 each. The new mid-range spa will sell for $8,200. What annual sales figure should you use in your analysis?
$3,239,000
$4,439,500
$890,500
$4,129,500
$2,348,500
Bubbly Waters currently sells 320 Class A spas, 470 Class C spas, and 220 deluxe model...
4,Bubbly Waters currently sells 370 Class A spas, 520 Class C spas, and 270 deluxe model spas each year. The firm is considering adding a mid-class spa and expects that if it does, it can sell 445 units per year. However, if the new spa is added, Class A sales are expected to decline to 260 units while the Class C sales are expected to increase to 545. The sales of the deluxe model will not be affected. Class A...
Siegel Company manufactures a product that is available in both a deluxe model and a regular model. The company has manufactured the regular model for years. The deluxe model was introduced several years ago to tap a new segment of the market. Since introduction of the deluxe model, the company’s profits have steadily declined and management has become increasingly concerned about the accuracy of its costing system. Sales of the deluxe model have been increasing rapidly. Manufacturing overhead is assigned...