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Green Woods sells specialty equipment for mountain climbers. Its sales for last

ID: 2770425 • Letter: G

Question

Green Woods sells specialty equipment for mountain climbers. Its sales for last year included $238,000 of tents and $411,000 of climbing gear. For next year, management has decided to sell specialty sleeping bags also. As a result of this change, sales projections for next year are $264,000 of tents, $426,000 of climbing gear, and $51,000 of sleeping bags. How much of next year's sales are derived from the side effects of adding the new product to its sales offerings? $0 $20,500 $41,000 $51,000 $82,000

Explanation / Answer

Solution:

Increase in sales of tents - $ 264,000 - $ 238,000 26,000 Increase in sales of climbing gear - $ 426,000 - $ 411,000 15,000 Add: Increase in sale of sleeping bags 51,000 Effect of change = 92,000 The answer to the above question is $ 92,000