Winnebagel Corp. currently sells 16,200 motor homes per year at $24,300 each, an
ID: 2714917 • Letter: W
Question
Winnebagel Corp. currently sells 16,200 motor homes per year at $24,300 each, and 6,480 luxury motor coaches per year at $45,900 each. The company wants to introduce a new portable camper to fill out its product line; it hopes to sell 10,260 of these campers per year at $6,480 each. An independent consultant has determined that if Winnebagel introduces the new campers, it should boost the sales of its existing motor homes by 2,430 units per year, and reduce the sales of its motor coaches by 486 units per year.What is the amount to use as the annual sales figure when evaluating this project?
Explanation / Answer
We will use incremental sales to evaluate the project.
Motor homes
Luxury motors
portable camper
Incremental sales
2430
-486
10260
Price per unit
24300
45900
6480
Incremental sales
59049000
-22307400
66484800
Total incremental sales = 59049000 -22307400 +66484800
=103226400
Motor homes
Luxury motors
portable camper
Incremental sales
2430
-486
10260
Price per unit
24300
45900
6480
Incremental sales
59049000
-22307400
66484800
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