Winnebagel Corp. currently sells 28328 motor homes per year at $65824 each, and

Question

Winnebagel Corp. currently sells 28328 motor homes per year at $65824 each, and 11079 luxury motor coaches per year at $104355 each. The company wants to introduce a new portable camper to fill out its product line; it hopes to sell 21673 of these campers per year at $11084 each. An independent consultant has determined that if Winnebagel introduces the new campers, it should boost the sales of its existing motor homes by 1950 units per year, and reduce the sales of its motor coaches by 916 units per year.

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

Explanation / Answer

Sales due solely to the new product line are:
21673 ($11084) = $240,223,532

Increased sales of the motor home line occur because of the new product line introduction; thus:
1950 ($65824) = $128,356,800

in new sales is relevant. Erosion of luxury motor coach sales is also due to the new mid-size campers;thus:
916 ($104355) = $95,589,180 loss in sales
is relevant. The net sales figure to use in evaluating the new line is thus:
$240,223,532 + $128,356,800 - $95,589,180 = $272991152

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.