Question

Winnebagel Corp. currently sells 28,400 motor homes per year at $75,000 each and 7,400 luxury motor coaches per year at $117,000 each. The company wants to introduce a new portable camper to fill out its product line; it hopes to sell 23,400 of these campers per year at $21,000 each. An independent consultant has determined that if the company introduces the new campers, it should boost the sales of its existing motor homes by 3,000 units per year and reduce the sales of its motor coaches by 890 units per year.

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

Answer 1

$820,530,000

Step-by-step explanation:

Calculation to determine the amount to use as the annual sales figure when evaluating this project

Campers sale revenue $ 491,400,000 (23,400*$21,000)

Add: Increase in motor homes sales $

$225,000,000

( 3,000*$75,000)

Less: Decrease in luxury motor coaches $ 104,130,000 (890*$117,000)

Annual sales figure $820,530,000

Therefore the amount to use as the annual sales figure when evaluating this project will be $820,530,000