Winnebagel Corp. currently sells 18,000 motor homes per year at $27,000 each, an

Question

Winnebagel Corp. currently sells 18,000 motor homes per year at $27,000 each, and 7,200 luxury motor coaches per year at $51,000 each. The company wants to introduce a new portable camper to fill out its product line; it hopes to sell 11,400 of these campers per year at $7,200 each. An independent consultant has determined that if Winnebagel introduces the new campers, it should boost the sales of its existing motor homes by 2,700 units per year, and reduce the sales of its motor coaches by 540 units per year.

What is the amount to use as the annual sales figure when evaluating this project?

$127,440,000

$182,520,000

$82,080,000

$133,812,000

$121,068,000

Winnebagel Corp. currently sells 18,000 motor homes per year at $27,000 each, and 7,200 luxury motor coaches per year at $51,000 each. The company wants to introduce a new portable camper to fill out its product line; it hopes to sell 11,400 of these campers per year at $7,200 each. An independent consultant has determined that if Winnebagel introduces the new campers, it should boost the sales of its existing motor homes by 2,700 units per year, and reduce the sales of its motor coaches by 540 units per year.

Explanation / Answer

a) $127,440,000 Statement showing computation of sales Particulars Motor Homes Motor Coaches Campers Increase (Decrease) in Sales due to project                             2,700.00                           (540.00)                                       11,400.00 Sales price per Unit                           27,000.00                       51,000.00                                         7,200.00 Total Sales due to new project                   72,900,000.00            (27,540,000.00)                              82,080,000.00            127,440,000.00

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