Winnebagel Corp. currently sells 23,000 motor homes per year at $61,000 each, an

Question

Winnebagel Corp. currently sells 23,000 motor homes per year at $61,000 each, and 8,500 luxury motor coaches per year at $98,000 each. The company wants to introduce a new portable camper to fill out its product line; it hopes to sell 18,000 of these campers per year at $10,500 each. An independent consultant has determined that if Winnebagel introduces the new campers, it should boost the sales of its existing motor homes by 2,300 units per year, and reduce the sales of its motor coaches by 1,000 units per year. What is the amount to use as the annual sales figure when evaluating this project?

Explanation / Answer

Particulars Amount ($) Working note Sale of new campers 189,000,000 18,000*$10,500 Add: Increase in sales of existing motors sales 140,300,000 2,300*$61,000 Less: Decrease in delux motor coach sales 98,000,000 1,000*$98,000 Relavant sales value 231,300,000

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