Winnebagel Corp. currently sells 25,800 motor homes per year at $38,700 each, an

Question

Winnebagel Corp. currently sells 25,800 motor homes per year at $38,700 each, and 10,320 luxury motor coaches per year at $73,100 each. The company wants to introduce a new portable camper to fill out its product line; it hopes to sell 16,340 of these campers per year at $10,320 each. An independent consultant has determined that if Winnebagel introduces the new campers, it should boost the sales of its existing motor homes by 3,870 units per year, and reduce the sales of its motor coaches by 774 units per year. What is the amount to use as the annual sales figure when evaluating this project?

Explanation / Answer

Sale of new campers $ 168,628,800 10320*16340 Add: Increase in slae of existing homes $ 149,769,000 3870*38700 Less: Decrease in sale of motor coaches $    56,579,400 774*73100 Annual sales figure $ 261,818,400

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