Winnebagel Corp. currently sells 28,300 motor homes per year at $74,500 each and
ID: 2649149 • Letter: W
Question
Winnebagel Corp. currently sells 28,300 motor homes per year at $74,500 each and 7,300 luxury motor coaches per year at $116,500 each. The company wants to introduce a new portable camper to fill out its product line; it hopes to sell 23,300 of these campers per year at $20,500 each. An independent consultant has determined that if Winnebagel introduces the new campers, it should boost the sales of its existing motor homes by 2,900 units per year and reduce the sales of its motor coaches by 880 units per year.
What is the amount to use as the annual sales figure when evaluating this project? (Do not round intermediate calculations.)
The answer is not $24,560,100.00
Required:What is the amount to use as the annual sales figure when evaluating this project? (Do not round intermediate calculations.)
The answer is not $24,560,100.00
Explanation / Answer
Answer:
Annual sales of new portable camper = 23,300 campers * $20,500 = $477,650,000
Add: Increase in sale of Existing motor homes = 2900 units *$74500 = $216,050,000
Less: Decrease in sale of Motor coaches = 880 units *$116500 = $102,520,000
Net Annual sales for the project = $591,180,000
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