Question

Winnebagel Corp. currently sells 28,600 motor homes per year at $76,000 each and 7,600 luxury motor coaches per year at $118,000 each. The company wants to introduce a new portable camper to fill out its product line; it hopes to sell 23,600 of these campers per year at $22,000 each. An independent consultant has determined that if the company introduces the new campers, it should boost the sales of its existing motor homes by 3,200 units per year and reduce the sales of its motor coaches by 910 units per year. What is the amount to use as the annual sales figure when evaluating this project? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Net sales

Answer 1

solution: The relevant annual sales would be the incremental sales which results from introduction of new line calculation of incremental sales |ь motor homes luxury motors coaches Portable camper relevant annual sales for evaluating this project Increase (Decrease) in units | Price per unit | Total sales a*b 3200 7 6000243200000 -910 118000 -107380000 23600 22000519200000 6550 20000