Travel America Coaches currently sells 15,000 motor homes per year at $94,000 ea

Question

Travel America Coaches currently sells 15,000 motor homes per year at $94,000 each, and 1,500 luxury motor coaches per year at $159,000 each. The company wants to introduce a low-range camper to fill out its product line; it hopes to sell 6,000 of these campers per year at $14,500 each. An independent consultant has determined that if Travel Coaches introduces the new campers, it should boost the sales of its existing motor homes by 1,500 units per year, and reduce the sales of its luxury motor coaches by 450 units per year. What amount should be used as the annual sales figure when evaluating this project?

Explanation / Answer

Hi,

Please find the detailed answer as follows:

New Campers = 6000*14500 = 87000000

+

Motor Homes = (1500)*(94000) = 141000000

-

Luxury Motors = - 450*159000 = 71550000

Total Sales Figure = $156450000

Answer is $156450000

Thanks.

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